NBFC Account Aggregator License

NBFC Account Aggregator License is needed for a company to go about as an consent broker which will empower monetary information sharing between financial institutions in the financial area. Nonetheless, the information must be moved with the client’s consent. This concept was evoked by the RBI.
Those entities that are longing to register as a NBFC-AA need to apply for NBFC-Account Aggregator License and they need to comply with all the expert course guidelines of RBI to keep up with the validity of their license. Resistance could prompt the dropping of NBFC-AA license of such entity.

Meaning of Account Aggregator

An Account Aggregator is a type of entity which is regulated by RBI and has a NBFC-AA license ensuring that an individual can safely and carefully access and offer data from one financial establishment, in which they have an account, to some other regulated financial establishment in the Account Aggregator network. Here it is essential to comprehend that the information can't be shared without the assent of the person. An individual can pick between many Account Aggregators. Account Aggregator has supplanted the lengthy terms and conditions of ‘blank cheque ' acknowledgment with authorization and control for each utilization of your information.

Financial Information Provider and Financial Information User

The sharing of information happens between financial information provider and financial information user.

We have clarified the significance of both these terms:

Financial Information Provider (FIP)- It is an entity, which is regulated under financial sector and assists in offering monetary help;

Monetary Information User (FIU)- RBI, SEBI, IRDA, PFRDA are the regulatory authorities which regulate and direct these entities.

The financial information which will be shared is characterized under the expert directions given by RBI (Department of Non-Banking Regulation) DNBR.

The Financial information is characterized under RBI provisions as-

"Financial Information" signifies data in regard of the accompanying with financial information providers-

Bank deposits inclusive of all such accounts, like fixed deposit, saving deposits, recurring deposits, and current deposits

Structured Organized Investment Product (SIP);

Deposits with NBFCs;

Commercial Paper (CP);

Deposit certificate;

Government Securities (Tradable);

Bonds;

Equity shares;

Debentures;

Mutual Fund Units;

Exchange Traded Funds;

CIS (Collective Investment Schemes) units;

Indian depository receipts;

Elective Investment Funds (AIF) units;

Balances under the National Pension System (NPS);

Insurance policies;

Units of Infrastructure Investment Trusts;

Units of Real Estate Investment Trusts;

Some other data as might be determined by the Bank for the motivations behind these headings, every once in a while.

Advantages of acquiring NBFC Account Aggregator License

Acquiring NBFC AA License is useful in the accompanying ways-

Functional benefit;

Guarantees smooth progression of credit information;

Serving customers turns out to be simple;

Helps in diminishing verification time for loan specialists henceforth expands productivity;

Decreased risks of bad credits.

Basics of NBFC Account Aggregator License

The NBFC-AA gives data with respect to the accounts held by clients. Data is held in a coordinated, combined and retrievable way. For a client, it is totally wilful to avail the account aggregator’s services. The NBFC-AA performs IT-arranged exercises which imply that client will get computerized data. The primary job of NBFC-AA (NBFC Account Aggregator) is account aggregation; in this manner, they won't go into financial assets transactions with its clients, not at all like other NBFCs.
An aggregator is allowed to convey investible excess in instruments and not so much for trading. Board-supported strategy of the account aggregator will estimate the service charge. Such rules and strategy took on by the account aggregator should be straightforward and accessible in the public area. The services delivered by the NBFC-AA (NBFC Account Aggregator) should be gotten by the valid agreement between the aggregator, client and monetary financial service provider.
The agreements of the license should be trailed by NBFC-AA (NBFC Account Aggregator) like insurance of client, complaint redressal, information security, corporate administration, audit control, and risk management structure. Exactly, NBFC-AA (NBFC Account Aggregator) gathers data in regards to the client's monetary resources and gives it to the clients in a solidified, coordinated and retrievable way. Set of rules was framed by the RBI which should be complied by such entities.

Essentialities for NBFC-AA Registration

For acquiring NBFC Account Aggregator License, there is a necessity to hold minimum of INR 2 Crores net owned funds. Be that as it may, the company will have a time-frame of a year to raise fund subsequent to acquiring RBI’s in-principal approval. No services can be given except account aggregation by NBFC-AA (NBFC Account Aggregator).
Subsequent to getting the in-principal approval from the controller, NBFC-AA (NBFC Account Aggregator) will have a time span of a year to set up all the vital innovation and tie-ups needed to do this aggregation business. According to the RBI, an entity which is enjoying aggregating accounts of a specific monetary area controlled by different regulators can be excluded from acquiring approval of RBI. RBI controls the NBFC-AA (NBFC Account Aggregator). These kinds of entities are not licensed to convey monetary activities like other NBFCs.
NBFC-AA will give data to the financial user in regards to the client. They are not qualified to do any finance-based exercises like other NBFCs. Considering all characteristics, we can't think about them as NBFCs ordinarily. NBFC Account Aggregators can't use the data of the financial assets of the clients for some other reason.

Obligations and Responsibilities of NBFC Account Aggregators

The great obligation of the NBFC-AA is to gather data of any client under unequivocal consent and disseminate such data. In this portion we check out a portion of duties and obligations of the NBFC-AA (NBFC Account Aggregators) according to the directions provided by the RBI-

Acquire client assent;

Acquire in-principal approval to deliver such exercises;

Conceive techniques for legitimate client identification;

Client’s rights should be protected;

Shield financial data of clients;

Guarantee that no data is recovered and transferred without acquiring the legitimate consent of the client.

How to obtain NBFC Account Aggregator License

The course of NBFC-AA registration is done based on directions given by the RBI. This sort of entity will not hold public assets and won't have any client interface. For NBFC-AA License, the accompanying steps should be taken into consideration-

The initial step is to get company registered according to Companies Act, 2013.

The company should bring the vital assets to the table to offer such kind of services.

It is mandatory for a company to put in an application to the RBI Department of Non-Banking Regulation, in Mumbai.

Such application ought to be in the form as given under Annex 1.

On looking at the qualification prerequisites assuming the RBI is contended that the company has the essential assets and fortitude, adequate capital structure, fit and legitimate promoters, leverage proportion of not more than 7, then, at that point, the RBI will allow in-principal approval.

The in-principal approval will be considered valid for one year and within that period the company is needed to set up innovation stage, go into different documentations and furthermore report whether the company operations are in compliance with the provisions of the terms of in-principal approval to the bank.

At long last the RBI will grant registration certificate as NBFC AA in the wake of being contended that the company can start tasks and is in consistence with the registration requirements.

Required Documents

By Applicant Company

PAN Card of Company

AOA, COI and MOA

Temporary Balance Sheet

Financial statement

Company Identification Information (Annexure-I) alongside Statutory Auditor

Board Resolution in regard of conveying exercises of NBFC-AA

Disclosure of IT Technology System

Shareholding Pattern’s details of the candidate company

Details of Directorship in the Company

Fixed Deposit Receipts as per NOF

Banker report in regard to current Account

By Director

Information related to the proposed head of the Company

Religious community Deed

ID Proof

Business Profile

Most noteworthy Qualifications Certificate

Experience Certificate

Banker’s report

CIBIL Report

By Shareholder

PAN card

MOA

AOA

COI

Audited Financial report

Credit Report

Banker's Report

Requirements needed to be accomplished by NBFC-AA (NBFC Account Aggregator) within the validity of in-principal approval

During the validity time frame, the company will make plan for a data innovation stage and complete all the legal documentation which is important to do tasks. Be that as it may, on account of resistance, RBI might drop the registration certificate of NBFC-AA.
You should know the terms on which RBI can drop the NBFC Account Aggregator License:

Assuming that the company stops conveying the activity of account aggregation;

The company isn't going along with the conditions subject to which the registration certificate has been given by the RBI; or

Assuming it is found that NBFC-AA (Non-Banking Financial Company-Account Aggregator) is presently not qualified to hold the registration certificate; or

Assuming the company fails to agree with the accompanying conditions:

1.RBI issued directions; or

2.Keeping up with accounts;

3.Publish and uncover its monetary position as per the law;

4.Review of books of account.

Fit and Proper Criteria for Promoters according to RBI

With the end goal of fit and proper criteria, NBFC-AA (NBFC Account Aggregator) will:

Draft a proper policy to ascertain fit and proper criteria of promoters.

The policy will be totally founded on the guidelines given by RBI.

A declaration shall be received from the managing directors/ directors/ CEO according to the format asked under directions.

A contract deed shall be received by the managing directors/ directors/ CEO according to the format asked under directions.

Outfit yearly statement on change of managing directors/ directors/ CEO appropriately affirmed and certified by the Statutory Auditors in regards to the fit and proper criteria within 15 days from the end of the financial year.

Standards for Data Security by NBFC-AA (NBFC Account Aggregator)

It is required for NBFC-AA to have legitimate IT framework as they convey a great deal of financial data of different clients. These sorts of entities will be exclusively liable for the protected stockpiling and transfer of information between financial information providers and financial information users. They would likewise need to guarantee that client credentials can't be recovered or stored in their framework.

With the end goal of information safety, the accompanying has been portrayed under headings-

Security from unauthorized access, change, obliteration, revelation, or scattering of accounts and date

Utilize the technology stage corresponding to keep monetary information;

Make a vital move for risk management

An external auditor should be CISA certified and, timely audit information system.

As we would see it, it is a generally excellent drive taken by the RBI to direct such kind of entities. For this, RBI presented NBFC Account Aggregators rules in the year 2016. In any case, it isn't desirable to consider them NBFCs as they are not conveying any sort of monetary movement.

Estabizz can provide you full-fledged advice and assistance to obtain NBFC Account Aggregator license as we are a group of exceptionally talented and devoted experts. We have practical experience in offering legal consultancy services.

How you can contact Estabizz?

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