RBI Framework for Self-Regulatory Organisations in India

March 15, 2025

Recently, the Reserve Bank of India (RBI) introduced a framework for recognising self-regulatory organisations (SROs) within the account aggregator (AA) ecosystem. This initiative aims to enhance the accountability and governance of non-banking financial companies (NBFCs) engaged in account aggregation. The RBI’s framework outlines the structure, responsibilities, and operational guidelines for SROs designated as SRO-AAs.

Definition of Account Aggregators

Account aggregators are entities that collect and consolidate financial information from various financial information providers (FIPs).
They serve as intermediaries, presenting this data to financial information users (FI-Us).
The purpose is to facilitate better financial decision-making for customers by providing a comprehensive view of their financial status.

Establishment Requirements

To be recognised as an SRO-AA, an applicant must be a not-for-profit company registered under Section 8 of the Companies Act, 2013. They must demonstrate a minimum net worth of ₹2 crore within one year of recognition or before commencing operations. This financial threshold ensures that the SRO-AA has the necessary resources to function effectively.

Diversity in Shareholding

The framework mandates that the shareholding of the SRO-AA be sufficiently diversified. No single entity can hold more than 10% of the paid-up share capital. This requirement is intended to prevent the concentration of power and promote balanced governance.

Membership Composition

An SRO-AA must maintain a membership of at least 25 unique entities from both FIPs and FI-Us. This diverse representation is crucial for encouraging collaboration and ensuring that the interests of all stakeholders are considered in decision-making processes.

Technological Capabilities

The applicant must demonstrate robust IT infrastructure and the capacity to implement technological solutions efficiently. This capability is essential for managing the complexities of data aggregation and ensuring secure transactions.

Operational Principles

The SRO-AA is expected to operate with credibility, objectivity, and responsibility. It should function independently, free from the influence of any single member or group. This independence is vital for maintaining impartiality and avoiding conflicts of interest.

Responsibilities of SRO-AAs

SRO-AAs are tasked with overseeing the AA ecosystem to promote healthy development. They must ensure equitable treatment of all members and uphold transparency in their operations. By acting as industry representatives, SRO-AAs play a critical role in building trust among participants and regulators.

Regulatory Oversight

The RBI maintains overall oversight of SRO-AAs to ensure compliance with the framework. This regulatory supervision is necessary for promoting accountability and safeguarding the integrity of the financial system.

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