In a strategic update to the financial landscape, the Reserve Bank of India (RBI) has revisited the role of Financial Information Providers (FIPs) within the Account Aggregator (AA) Framework. This change involves the replacement of ‘Pension Fund’ with ‘Central Recordkeeping Agency.’ In this article, we delve into the implications and rationale behind this crucial alteration.
The Master Direction – Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016, defined the term ‘Financial Information Provider’ (FIP) in paragraph 3(1)(xi). The FIP plays a pivotal role within the Account Aggregator ecosystem, facilitating the secure exchange of financial data.
The recent modification proposed by the RBI pertains to the inclusion of ‘Central Recordkeeping Agency’ (CRA) in place of ‘Pension Fund’ as the designated FIP. In the context of the National Pension System (NPS) architecture, CRAs, registered under section 27 of the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013, act as intermediaries managing NPS subscriber data, including balances.
The decision to make this change is rooted in the need for alignment with the NPS structure, and it was suggested by the PFRDA. By incorporating CRAs as FIPs in the AA ecosystem, the RBI aims to enhance the efficiency and synergy within the NPS system. This update streamlines the flow of financial information and reinforces the integrity of the Account Aggregator Framework.
The RBI’s decision to replace ‘Pension Fund’ with ‘Central Recordkeeping Agency’ as the designated Financial Information Provider (FIP) in the Account Aggregator (AA) Framework represents a strategic move to align financial services and data management within the National Pension System (NPS). This change, in response to the recommendations of the Pension Fund Regulatory and Development Authority (PFRDA), ensures a more cohesive and efficient NPS structure, benefiting subscribers and stakeholders alike. The modification reinforces the importance of adaptability and collaboration in the evolving financial landscape. These adjustments will impact the exchange of financial data and contribute to the overall enhancement of the AA ecosystem.
Reserve Bank of India
RBI/2023-24/76
DoR.FIN.REC.52/03.10.123/2023-24
October 26, 2023
All Regulated Entities of the Bank
Madam/ Dear Sir,
Review of Financial Information Provider (FIP) under Account Aggregator Framework
Please refer to the paragraph 3(1)(xi) of Master Direction – Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016 defining the term ‘Financial Information Provider’.
2. As per National Pension System (NPS) architecture, Central Recordkeeping Agency (CRA), registered under section 27 of the Pension Fund Regulatory and Development Authority (PFRDA) Act, 2013, acts as an interface between the different intermediaries in the NPS system. CRAs hold information pertaining to the subscribers including the balances under NPS. Accordingly, and as suggested by the PFRDA, it has been decided to replace ‘Pension Fund’ with ‘Central Recordkeeping Agency’ as the financial information provider in the AA ecosystem.
3. The Master Direction – Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016, is being modified accordingly.
Yours faithfully,
(R. Lakshmi Kanth Rao)
Chief General Manager-in-Charge
