Date :March 03, 2016

The Reserve Bank of India has released on its website today, a draft of the directions (Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016) to put in place the regulatory framework to allow a new kind of Non-Banking Financial Company (NBFC), which could act as an account aggregator.

Why Account Aggregator?

At present, persons holding financial assets, such as, savings bank deposits, fixed deposits, mutual funds, 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.

The Reserve Bank 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.

According to the draft directions:

* Only companies registered with the Reserve Bank as NBFC – AA will be able to undertake the business of an account aggregator.

* 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 Reserve Bank.

* The Net Owned Fund of such companies should not be less than ₹ 2 crore.

* An account aggregator will not be able to undertake any other business other than the business of account aggregator.

* 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, namely, RBI, SEBI, IRDA, and PFRDA shall be considered for aggregation.

* Account aggregation services will be provided under specific application by the customer for availing such services and would be backed by appropriate agreements/ authorisations.

* Pricing of services would be as per the account aggregator’s Board approved policy.

* No financial asset related customer information pulled out by the account aggregator from the financial service providers should reside with the account aggregator.

* An account aggregator will not support transactions in financial assets.

Seeking views/comments from all interested parties and general public, the reserve Bank of India has said that suggestions and comments on the draft directions may be sent by March 18, 2016 to the Chief General Manager, Reserve Bank of India, Department of Non-Banking Regulation, 2nd Floor, World Trade Centre, Cuffe Parade, Mumbai – 400005 or can be emailed by clicking here. The final set of directions in the subject matter will be issued after taking into consideration the feedback received on the draft directions.

The Reserve Bank has, as it had announced in its Press Release dated July 02, 2015, created a separate category of NBFC called Non-Banking Financial Company – Account Aggregator (NBFC-AA) to provide account aggregation services.

Alpana Killawala
Principal Adviser

Press Release: 2015-2016/2077

RBI Central Board meets at Chennai: RBI to allow Account Aggregator NBFCs; to set up Financial Inclusion Advisory Committee

Date :Jul 02, 2015

The 552nd meeting of the Central Board of Reserve Bank of India was held on Thursday, July 02, 2015 at Chennai. Dr. Raghuram G. Rajan, Governor, Reserve Bank of India chaired the meeting. Besides Deputy Governors Shri Harun R. Khan, Dr. Urjit R. Patel, Shri R. Gandhi and Shri S.S.Mundra of the Reserve Bank of India, the other Directors of the Central Board of the Reserve Bank present at the meeting included Shri Y.H. Malegam, Dr. Anil Kakodkar, Shri Kiran Karnik, Dr.Nachiket Mor, Dr. Indira Rajaraman, and Shri Y.C.Deveshwar.

Later addressing the press conference, the Governor stated that the Board reviewed the state of the economy. He said that the economy was recovering and there were signs of capital investments picking up. The Government was trying to put stalled projects back on track and the monsoon, thus far, was above normal. Exports were relatively weak but the weakness was seen across many countries and was more on account of global factors. The Governor said that the Reserve Bank will continue to do spade work for sustainable growth in the coming year.

The Governor, in response to a query from media said that Greece was an evolving situation. Direct exposure to Greece for India was limited as indicated by a few reports done by the Reserve Bank. Given, the risk of sentiments of global investors changing, there might be initial burst of volatility in financial markets, if there are untoward developments in Greece, after which discerning investors will be able to distinguish the India’s story which is of growth and stability. He also indicated that “Our macro policies were good and we had enough buffers, including foreign exchange reserves to protect against any possible eventuality”.

The Governor also announced that the Reserve Bank will put in place a regulatory framework to allow a new kind of Non-Banking Finance Company (NBFC), which could act as an account aggregator to enable the common man to see all his accounts across financial institutions in a common format. The idea of such an NBFC had emanated from the Financial Stability and Development Council (FSDC).

Deputy Governor Shri S.S. Mundra then briefed the media and stated that the Reserve Bank proposes to recommence the Financial Inclusion Advisory Committee (FIAC) to take the financial inclusion agenda forward. He said that the work on financial inclusion was far from complete and a road map needs to be laid out, as the Prime Minister indicated at the Reserve Bank’s 80th Anniversary celebrations, to take the agenda forward now. This has also assumed critical importance following the massive efforts made for opening of bank accounts under the Prime Minister’s Jan Dhan Yojana (PMJDY) with focus on Jan Dhan accounts, Aadhar identity and Mobile phones (JAM). The Reserve Bank would request all financial sector regulators as also the Government, some Self-Regulatory Organisations, Research Organisations, Unique Identification Authority of India (UIDAI), National Payments Corporation of India (NPCI) and such other stake holders for nomination. He stated that as an input to the FIAC, the Reserve Bank will set up an Internal Group with the concerned departments to prepare a blue print for financial inclusion for the next five to ten years identifying ways to integrate resources available with all financial institutions in achieving the goals for financial inclusion.

Deputy Governor Shri Harun R Khan highlighted the measures being taken to move towards less-cash less-paper based payment system, with focus on creating more acceptance infrastructure for the huge numbers of plastic cards issued by banks and upscaling mobile banking.

The Board also discussed the draft Annual Report for 2014-15. The Annual Report of the Reserve Bank gives an account of what was planned in the past year, what was achieved and what was not, as also, what the Reserve Bank proposed to do in the coming year.

Sangeeta Das
Director

Press Release : 2015-2016/27

 

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