The Reserve Bank of India (RBI) on Wednesday invited applications for a self-regulatory organisation (SRO) to oversee the account aggregator (AA) ecosystem. The SRO should be set up as a not-for-profit company with a minimum net worth of Rs 2 crore within one year after recognition by the RBI, according to the new framework.
“The SRO-AA is expected to operate with credibility, objectivity and responsibility under the overall oversight of the Reserve Bank, to promote healthy and sustainable development of the AA ecosystem,” it said.
The interested parties should apply through the PRAVAAH portal before June 15.
The RBI had introduced the account aggregator framework in September 2016. The AA framework facilitates secure and seamless exchange of specified financial information through non-banking financial company-account aggregators, which act as intermediaries between financial information providers (FIPs) and financial information users (FI-Us).
These FIPs and FI-Us fall under the purview of different financial sector regulators — RBI, SEBI, Irdai and PFRDA.
Further, the department of revenue is deemed to be the regulator for Goods and Services Tax Network for the purpose of onboarding the AA ecosystem.
The RBI said the AA ecosystem is distinct in its complexity, involving exchange of data among a diverse array of Regulated Entities (REs) operating under varied regulatory environments.
“This complexity necessitates frequent coordination among these REs to address various operational issues such as dispute resolution, standardised agreements, common services,” it said.
Given its inherent diversity and to support its smoother adoption and stabilisation, the RBI added that it is desirable to have a dedicated SRO for the account aggregator ecosystem.
According to the framework, primary responsibility of the SRO-AA towards its members would be to promote best business practices and controls.
The SRO-AA will have to establish minimum benchmarks and conventions for professional market conduct amongst its members.
“The SRO-AA is expected to operate with transparency, professionalism and independence, in order to foster greater confidence in the integrity of the ecosystem,” it said.
Compliance with the highest standards of governance as prescribed in the Companies Act, 2013 is a pre-requisite for an effective SRO-AA.