NBFC Account Aggregator is a financial entity that function as an account aggregator (for NBFC customers), who provides information on various accounts held by a customer in different NBFC entities. The account information will be a consolidated, organised and retrievable data about the various types of financial enagagement by a customer among different NBFC products (like insurance, mutual funds etc).
What is the significance of NBFC -AA
Usually, people may have different financial products from the financial institutions – savings bank deposits, fixed deposits, pension, insurance policies, Mutual Funds et. Customers may have only vague idea about their holdings of these products and services.
“At present, financial asset holders such as holders of savings bank deposits, fixed deposits, mutual funds and insurance policies, get a scattered view of their financial asset holdings if the entities with whom these accounts are held fall under the purview of different financial sector regulators.” – says the RBI about the rationale for NBFC -AA.
Here, the purpose of the NBFC – AA is to provide information to the customer about the various products he has in a common format. It will provide information on various accounts held by a customer in a consolidated, organised and retrievable manner. The option to avail the services of the account aggregator will be purely voluntary for a customer. The activities of the AA will be IT oriented, implying that digital information will be provided to the customer). Unlike other NBFCs, the AA will not provide any transaction in financial assets by its customers. His only role will be that of account aggregation. At the same time, deployment of investible surplus by the aggregator in instruments, not for trading, will be permitted. Pricing of services will be as per the board-approved policy of the account aggregator.
Services of the AA should be backed by appropriate agreements/authorisations between the aggregator, customer and financial service provider. The AA has to follow the terms and conditions of the licence (such as customer protection, grievance redressal, data security, audit control, corporate governance and risk management framework).
The idea of NBFC originated from the Financial Stability and Development Council (FSDC).
