RBI Opens Applications for Account Aggregator Self-Regulatory Body

The Reserve Bank of India (RBI) has introduced a comprehensive framework for recognising Self-Regulatory Organisations (SROs) in the Account Aggregator (AA) ecosystem. 

This framework outlines the eligibility criteria, governance structure, and responsibilities of SROs, aiming to enhance professional standards and best practices within the sector. Applications for recognition must be submitted via the PRAVAAH portal by June 15, 2025.

Account Aggregator Ecosystem and Its Regulatory Structure

The AA framework was initially introduced by the RBI in September 2016 to facilitate the secure exchange of financial data through Non-Banking Financial Company-Account Aggregators (NBFC-AAs). 

These entities act as intermediaries between Financial Information Providers (FIPs) and Financial Information Users (FI-Us), ensuring seamless data-sharing processes. The ecosystem operates under multiple regulators, including the RBI, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), and Pension Fund Regulatory and Development Authority (PFRDA).

Additionally, the Department of Revenue is recognised as the regulator for the Goods and Services Tax Network (GSTN) concerning its integration into the AA system.

Given the diverse regulatory environment, the AA ecosystem requires continuous coordination among Regulated Entities (REs) to address operational challenges such as dispute resolution, standardised agreements, and common services.

The RBI has emphasised the necessity of an SRO to ensure structured oversight and facilitate smoother adoption of the framework.

Role and Governance of SROs in the AA Ecosystem

The primary function of an SRO-AA is to uphold high standards of business conduct and professional integrity among its members. It will be responsible for establishing industry-wide benchmarks, ensuring compliance with best practices, and fostering transparency within the ecosystem. The SRO-AA must operate independently while maintaining professionalism and integrity to strengthen confidence in the system.

Furthermore, the RBI has mandated that the governance of an SRO-AA adhere to the highest standards outlined in the Companies Act 2013. 

This requirement ensures accountability and ethical management within the AA framework. By implementing this structure, the central bank aims to enhance stability and efficiency in financial data sharing while promoting self-regulation among participating entities.

Conclusion

The introduction of SROs in the Account Aggregator ecosystem marks a significant step towards strengthening governance and operational efficiency in financial data sharing. 

By setting regulatory standards and fostering coordination among stakeholders, the RBI aims to ensure a more structured and secure environment for financial information exchange. Establishing an independent and transparent SRO-AA will further bolster trust and stability within the ecosystem.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.