RBI floats draft framework for account aggregator NBFCs

The Reserve Bank today came out with a draft regulatory framework for a new kind of NBFC which would act as an account aggregator to help people view their accounts across financial institutions in a common format.
Only companies registered with the RBI as Non-Banking Financial Company (NBFC) - AA will be able to undertake the business of an account aggregator, the draft said.
"Entities being regulated by other financial sector regulators and aggregating only those accounts relating to the financial assets of that particular sector will not need to register with the RBI," the draft said.
RBI has sought comments on the 'Draft Regulatory Framework for Account Aggregator Companies' to facilitate consolidated viewing of financial assets holdings till March 18.

The proposal said an account aggregator will not be able to undertake any other business other than account aggregation. Further, business of an account aggregator will entirely be information technology (IT) driven.
Initially, only financial assets whose records are stored electronically and are under the regulation of the financial sector regulators -- RBI, SEBI, IRDA, and PFRDA -- would be considered for aggregation.

"An account aggregator will not support transactions in financial assets," the RBI draft said.
The RBI will regulate and supervise the activity of account aggregation with a view to ensuring that the services provided and the terms at which these are provided conform to prescribed standards.

At present, persons holding financial assets such as savings bank deposits, fixed deposits, mutual funds and insurance policies do not get a consolidated view of their financial asset holdings, especially when the entities fall under the purview of different financial sector regulators.
Account aggregators would fill this gap by collecting and providing the information of customers' financial assets in a consolidated, organised and retrievable manner to the customer or any other person as per the instructions of the customer.
The investors will be able to avail the service of an account aggregator purely at their option, RBI said.