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NBFC Account Aggregators License
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NBFC Account Aggregators License

Advisory on business plans and compliances for NBFC AA.
End-to-end assistance in application with RBI.
Complete assistance for new and existing Account Aggregators for RBI registration.
Liaising with the RBI till the Certificate of registration is granted.
Compilation of various documents and filing of online application for registration.


    Overview of NBFC Account Aggregators

    NBFC AAs are the type of financial entities whose primary business is similar to a consent broker between financial institutions. These entities enable the sharing of financial data of prospective customers to the financial institutions to facilitate the lending of secure loans to eligible customers. The data can only be transferred or shared after obtaining consent from the user. These institutions were conceptualised by the RBI in 2015 and since then the RBI has announced master directions for these institutions.

    The information shared by NBFC AA with other NBFCs is consolidated and organized. The information consists of details regarding financial statements, investments, other debts, etc. The helps other NBFCs in identifying the eligibility of the candidate for granting loans. Thus, NBFC AA helps to decrease the NPA or bad loans of other NBFCs and improves their balance sheet.

    The business model contains two entities:

    Financial Information User (FIU): These are the entities regulated by institutions like SEBI, IRDAI, RBI, and PFRDA. These entities could be other insurance companies, NBFCs, banks, etc.

    Financial Information Provider (FIP): This entity offers financial services and gives details about the customers.

    What information is consolidated in the financial information?

    Details of bank deposits of customers like savings deposits, fixed deposits, current account details, recurring deposits, etc.
    Structured Investment Products (SIP), Commercial Paper (CP), deposits with NBFCs, Certificates of Deposit (CD), Tradable Government Securities, Bonds, Equity shares, Debentures, Mutual funds units, Collective investment Schemes units, Exchange-traded funds, Alternative Investment funds units, Balances under the National Pension Systems, Units of real estate investments, infrastructure investment details, and any other investment detail.

    Duties and Benefits of NBFC Account Aggregator

    Duties of NBFC AA:

    The main responsibility of NBFC AA is to consolidate financial information about any customer after obtaining their consent and then share the information with other financial institutions. Here is the list of responsibility of NBFC AA:

    Obtaining Customer’s consent.
    Getting in-principle approval from the regulatory authority to conduct activities of account aggregator.
    Apply the method of proper identification of prospective customers.
    Lay down citizen’s charter for the protection of customer’s identification.
    Safeguarding of customers’ data.

    Benefits of opening NBFC AA:

    NBFC AA performs IT-oriented activities of converting all the information of a customer in an easy-to-access digital format file.
    Give customers a proper grievance handling mechanism.
    Protect data of customers while sharing.
    Ensure other financial institutions get the best customers for their products.
    Increases options of financial products for customers.

    Eligibility Norms for NBFC Account Aggregator Licence

    NBFC AA must have a net owned funds of at least Rs. 2 crores.
    The company does get a time period of a year to raise the minimum amount after getting the in-principle approval from RBI.
    The NBFC AA cannot provide any other service apart from sharing information under the master directions of RBI.
    If the AA is aggregating information for financial entities regulated by other regulatory bodies then they need not get the approval of RBI.
    These institutions can’t conduct fund-based activities.
    The institution cannot utilize customer’s financial information for any other purpose.
    Document Required

    Documents Required For Registering As NBFC Account Aggregator

    Here is a quick checklist of documents required to register as an NBFC Account Aggregator:

    ID Proof (Aadhar Card/Voter ID Card/Passport or Driving License).
    Copy of PAN Card.
    Passport Size Photos.
    Address Proof (Bank Statement, Telephone bill, Mobile Bill, and Electricity Bill).
    Ownership Documents or Rent Agreement for office space.
    Electricity bill.
    Certified Copy of Certificate of Registration.
    A copy of Fixed Deposit receipt and bankers’ certificate of lien indicating balances in support of Net Owned Funds.
    Bankers Report for Applicant Company/ group companies.
    Certified copy of an extract of the main object clause in the MOA (Memorandum of Association) relating to the financial business.
    Certified Copy of the Board resolution.
    No Objection Certificate from the owner for rented property.
    CIBIL records of all shareholders (more than 10% share in Company) and directors.
    Education & Experience proof of promoters.
    Net worth certificates of directors and shareholders.

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      Procedure for Registering as NBFC Account Aggregator

      The process of NBFC Account Aggregator registration is carried out based on RBI’s master directions. These entities are not allowed to hold public funds and do not have any customer interface. Follow these steps to register an NBFC AA with RBI.

      The first step is to register the company under the Companies Act, 2013 with the Registrar of Companies.
      The company must get the necessary infrastructure to offer services of customers data sharing and data protection.
      The company should have a proper capital structure to support the services of account aggregator.
      The character or image of the management must be good and should not be contradictory to the public interest.
      The company must have the minimum net owned fund of Rs. 2 crores or it should have the plan to raise the fund in one year after the principal approval from RBI.
      Promoters of the company must be fit and proper as per the master directions of RBI.
      The leverage ratio of the NBFC AA must not be more than 7 times.
      The IT infrastructure should be advanced enough to ensure safe data transfer and data protection of the customer.

      Norms for NBFC AA during the In-principle Approval Period

      During the validity period of in-principal approval, a company must complete all the legal documentation to carry out the operations of account aggregator. The company should also make arrangements to set up a proper IT infrastructure to support its services. The following violations could lead to cancellation of in-principle approval by RBI. 

      If the company ceases to carry out operations of the account aggregator in the said period.
      If the company fails to comply with the norms of RBI.
      If the company doesn’t maintain its accounts or fails to disclose its financial position to the law.
      If after inspection of its accounts books, some discrepancy is found.
      If the company is not able to raise the minimum net owned funds.
      If the company fails to set up and maintain IT infra to support its operations.


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      Frequently Asked Questions on NBFC Account Aggregators License
      IS NBFC-AA Registration Necessary For Entities Regulated By Another Financial Sector Regulator?

      Entities which are regulated by other financial sector regulators are exempted from the need to register as an NBFC-AA. Such exemption is allowed to only those entities which are involved in the aggregation of accounts of a customer of another financial sector.

      What Is The Main Function Of NBFC-Account Aggregators?

      Account aggregators collect information about customers’ financial assets and supply the information in a consolidated, organized, and retrievable manner on the customer’s consent. Investors would be ready to take the services of the account aggregators on their discretion.

      Is It Required To Put AA Operations On Hold Till The CoR Is Granted If The Existing Businesses Have Made Applications For NBFC-AA Registration?

      After applying for registration, they’re permitted to hold operations of NBFC account aggregator till the CoR is rejected by the authority or twelve months from date filing of the application, whichever is earlier.

      Is It Required For The Existing Business Of Account Aggregation To Apply For NBFC-AA?

      Yes, it had been mandatory for all the prevailing businesses of account aggregator to register within the amount of 1 month from the date of issue of master directions by RBI. Directions were issued by RBI on 2nd September 2018.

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