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Account Aggregator License

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Account aggregator license

An NBFC Account Aggregator (NBFC-AA) is a financial entity that facilitates the sharing of data across multiple financial institutions by acting as a “consent broker.” Introduced by the RBI in September 2016, NBFC-AAs aggregate financial data from various accounts such as bank, investment, and consumer accounts, enabling structured data sharing between Financial Information Providers (FIPs) and Financial Information Users (FIUs) with user consent.

FIPs provide account information, while FIUs use this data for purposes like market assessment and customer analysis. NBFC-AAs consolidate customer data from different NBFC products, such as mutual funds and insurance, offering an organised and retrievable view of their financial engagement. The consent to share and revoke data lies entirely with the user.

Requirements for obtaining an NBFC-AA License:

  • Minimum Capital Requirement: To obtain an NBFC Account Aggregator License, a minimum capital of ₹2 crores is necessary. The company will have a period of 12 months from receiving principal approval from the RBI to raise this capital. During this time, the NBFC-AA can only engage in account aggregation services.
  • Customer Information Disclosure: The NBFC Account Aggregator must provide financial users with information related to the customer. Unlike other NBFCs, the NBFC-AA is prohibited from conducting fund-based activities and cannot utilize customers' financial data for purposes beyond account aggregation.
  • Technology and Infrastructure Setup: Upon receiving regulatory approval, the NBFC Account Aggregator has 12 months to establish the essential technology and partnerships required to operate its aggregation business.
  • Exemption for Sector-Specific Entities: As per RBI guidelines, entities that aggregate accounts within a specific financial sector regulated by other authorities may be exempt from obtaining RBI approval. However, these entities are not permitted to engage in financial activities like traditional NBFCs.

Steps to obtain NBFC Account Aggregator License in India?

  1. Registering the company under the Companies Act, 2013.
  2. The organization must possess the necessary resources to provide account aggregation services effectively.
  3. To operate as an Account Aggregator, the company should develop a comprehensive plan that outlines an adequate capital structure.
  4. The management team must demonstrate impartiality and prioritize public interest in their decision-making.
  5. Certificate of Registration (CoR): Obtaining a Certificate of Registration from the Reserve Bank of India is mandatory to conduct account aggregation activities.
  6. Applicants are required to submit a formal application to the RBI to obtain the CoR.
  7. A minimum capital of ₹2 crores is required to qualify for the license.
  8. IT and Data Infrastructure: The organization must be equipped with a robust IT and data innovation framework to facilitate account aggregation services.
  9. Leverage Ratio: The leverage ratio should not exceed 7 times.
  10. Promoter Eligibility: Promoters of the NBFC-AA must be fit and compliant with regulatory standards.

Conditions for Cancellation of NBFC Account Aggregator License

The RBI-DNBR reserves the right to cancel the NBFC Account Aggregator License under the following circumstances:

  • The company is non-operative as an Account Aggregator in India.
  • The company fails to meet any conditions under which the Certificate of Registration was granted.
  • The RBI determines that the company is no longer eligible to hold the Certificate of Registration.
  • The company violates any mandatory conditions required for obtaining the Certificate of Registration.

Additionally, the company may face cancellation if it fails to:

  • Non-Adherence to relevant directions issued by the RBI.
  • Not-maintaining accounts or disclosing financial information as mandated by the Bank or applicable laws.
  • Non-Submission of its books of accounts or other relevant documents for inspection by the Bank.