The Reserve Bank of India (RBI) on Wednesday unveiled a framework for recognising self-regulatory organisations (SROs) for the account aggregator (AA) ecosystem, even as it invited applications for recognition of SRO-AAs.

NBFC (non-banking financial companies)-AAs undertake the business of account aggregation — retrieve/ collect specified financial information from financial information providers (FIPs) falling under the purview of various financial sector regulators (FSRs) and aggregate, consolidate and present such information to the customers or financial information users (FI-Us).

Under the framework, an SRO-AA should be set up as a not-for-profit company registered under Section 8 of the Companies Act, 2013.

The applicant should have/ demonstrate to achieve a minimum net worth of ₹2 crore within one year after recognition as an SRO-AA by the RBI, or before commencement of operations as an SRO-AA, whichever is earlier. Thereafter, the SRO-AA has to maintain the minimum required net worth on an ongoing basis.

Sufficiently diversified

The shareholding of the SRO-AA should be sufficiently diversified and no entity can hold 10 per cent or more of its paid-up share capital, either singly or acting in concert. To ensure balanced representation, the SRO-AA should have at least 25 unique entities each from FIPs and FI-Us as its members at all times.

The RBI said the applicant must have capability and resources for a robust IT infrastructure and the ability to deploy technological solutions within a reasonable timeframe.

According to the framework, the SRO-AA is expected to operate with credibility, objectivity and responsibility under the overall oversight of the RBI, to promote healthy and sustainable development of the AA ecosystem.

SRO-AA responsibilities

The RBI said it is expected that the SRO-AA functions above self-interest of any sort and addresses larger concerns of the ecosystem and financial system as a whole.

“To maintain credibility, the SRO-AA should operate independently, free from the influence of any single member or group of members. This would ensure refined decision-making and prevent the organisation from being swayed by the interests of a dominant few,” per the framework.

Further, the SRO-AA should maintain impartiality, avoid conflicts of interest and ensure unbiased oversight over its members.

“The independence of the SRO-AA would enhance its reputation as a neutral and reliable entity, essential for gaining the trust and confidence of both participants and financial sector regulators.

“While acting as the industry representative, the SRO-AA is expected to ensure equitable and transparent treatment for all its members,” according to the framework.