NBFC Account Aggregators are entities that facilitate the sharing of knowledge
across various financial sector organizations and act as “consent brokers”, i.e., the
intermediate data transfer amongst the financial organizations with the consent of the user.
This was declared by RBI in September 2016 stating master directions for a replacement class of
NBFC’s called Account Aggregators. NBFC Account Aggregator is those sorts of elements which set
about as assent agent who will empower financial information sharing among financial
institutions within the money related part. Though, the knowledge must be moved with the assent
of the client. This was conceptualized by the RBI within the year 2015. The RBI has announced
master directions for Non-Banking Finance Companies – Account Aggregators (NBFC-AA).
NBFC-AA (NBFC Account Aggregator) may be a quite budgetary element that is involved within the process of giving data to NBFC clients identified with accounts held by clients in various NBFCs. Such data are going to be in a united and sorted out way. the info is going to be associated with the financial involvement of the customer with the varied products of NBFC.
To provide a simple understanding, an Account Aggregator is an entity that will pull and consolidate all of an individual’s financial data and present an equivalent in a manner that permits the reader to simply understand and analyze the various financial holdings of an individual. at the present, our financial holdings are scattered across various financial instruments, with various financial intermediaries, which come under the purview of varied financial regulators.
For example, a private may have investments in fixed deposits with ABC Bank which comes under the purview of RBI, open-end fund investments with EFG AMC which comes under the purview of SEBI, and life assurance cover with HIJ Insurance Corporation (which comes under the purview of IRDAI).
Collecting all the scattered data from each of those investments and consolidating an equivalent for submission to a financial organization while applying for a loan, may convince be a time-consuming and rather confusing job for a private. The NBFC-AA structure was preceded with the intent to help individuals get a consolidated aspect of their financial holdings spread across the purview of different financial sector regulators.
Recently we’ve seen a pointy boost within the interest of getting an NBFC-AA license. Ever since the Structure was launched in 2016, around 8 entities have applied for the Account Aggregator License out of which one has been given the Certificate of Registration while the others are granted in-principle. Apart from the above, we’ve seen interest from the new age digital lending or app-based NBFCs.
We must understand the usefulness of the account aggregator before understanding the
NBFC AA license application process. Apart from receiving approval and holding the record in a fixed
format, the NBFC Account aggregators are empowered to exchange financial information through
institutions. This results in the simple sharing of data from the financial information provider (FIP)
to the recipient of financial information (FIU). In the following section, let us understand in-depth
these two words.
Master Directions Have Defined The Financial Information As:
Financial Information consists of the following information:
The key role of the NBFC-Account Aggregator is to provide data in relation to the accounts kept by customers. In a sorted, combined, and retrievable way, data is stored. It is completely intentional for a customer to appreciate the account aggregator’s services.
The NBFC-AA conducts IT-oriented operations that enable specialized data to be collected by the customer. The primary task of NBFC-AA (NBFC Account Aggregator) is account collection; unlike other NBFCs, they would not go into monetary resource exchange with their customers in this way. An aggregator is authorized to transmit the surplus of investment in instruments and not for exchange. In the Board-affirmed method of the record, the aggregator will pick the administration’s estimate. The rules and methodology adopted by the account aggregator must be open and public space available.
The NBFC-AA (NBFC Account Aggregator) administrations must be aware of the required understanding/between the aggregator, customer and provider of financial services. The terms and states of the permit must be trailed by NBFC-AA (NBFC Account Aggregator) including insurance of customer, complaint redressal, data security, corporate governance, audit control, and risk management system. The Financial Stability and Development Council (FSDC) supports the NBFC-AA option.
Completely, NBFC-AA (NBFC Account Aggregator) collects information about the monetary resources of the business and delivers it in a merged, sorted out and retrievable way to the customers. The RBI drafted a set of rules that must be tracked by these kinds of substances.
The functions and responsibilities of the NBFC-AA are as follows:
On the basis of master directions provided by the RBI, NBFC-AA registration is carried
out. There will not be public funds and some kind of user interface for this form of substance.
Accompanying Measures should be followed for NBFC-AA (NBFC Account Aggregator)
The company will prepare for a data innovation platform during the legitimacy phase and
complete all the legal documentation that is necessary for doing activities. However, RBI can
CoR of NBFC-AA on Account Of Non-Compliance:
NBFC-AA must have a legal IT system since they convey a lot of monetary data from
various customers. The covered stockpiling and transition of information from money-related data
providers to budgetary data customers would be solely responsible for these kinds of elements. They will
also need to ensure the customer credentials in their system can not be recovered or stored.
RBI-DNBR may cancel the Aggregator Account Registration Certificate if any of
the following conditions are met:
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