CRA to replace pension funds as FIP in account aggregator ecosystem

The Reserve Bank of India (RBI) announced on Thursday that the Central Recordkeeping Agency (CRA) will replace Pension Funds as the Financial Information Provider (FIP) in the Account Aggregator (AA) ecosystem.

The RBI modified certain sections of the Account Aggregator (AA) in the master direction on Non-Banking Financial Company (NBFC) by stating that some entities eligible to join the AA ecosystem as Financial Information Users (FI-U) must join as Financial Information Providers (FIP) provided they possess the specified financial information and meet the criteria outlined for FIPs.

This action comes in the backdrop of the RBI's observation that these entities, initially enrolled as FI-Us within the AA framework, are found to be accessing financial data from other FIPs but failing to reciprocate by sharing their own financial information, the notification added.

According to the directions from the Pension Fund Regulatory and Development Authority (PFRDA), the CRA, which acts as an interface between the different intermediaries in the National Pension Scheme (NPS) system, holds relevant information about the subscribers and their balances in the NPS and has therefore suggested to the RBI to replace the Pension Funds with CRA as the financial information provider (FIP) in the AA ecosystem.

As per RBI, an Account Aggregator means a non-banking financial company (NBFC) that undertakes the business of an account aggregator, for a fee, among other services.

The financial information provided by a Financial Information Provider to an Account Aggregator for transferring to the customer or to a Financial Information User shall not be used or disclosed by an Account Aggregator or the Financial Information User except as may be specified in the consent.