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The NBFC Account Aggregator framework came into existence in 2016, wherein the account aggregators facilitate data allocation from various financial sector entities and act as a consent broker. It involves transit of data among the financial organizations but only after getting the approval from client. The RBI had issued master directions for the same. Let’s discuss more on NBFC AA License.
Collecting scattered data and consolidating it, and submitting to a financial institution while applying for a loan, can prove to be a time-consuming as well as confusing job for an individual. Hence the concept of NBFC AA was introduced to help people get a consolidated view of their financial holdings that is spread across different financial sector regulators.
Before we understand the process of obtaining NBFC AA License, we need to understand certain terms:
These are financial entities providing financial data allocation from financial information providers to financial information users. The consent of the client is a must.
These are entities that provide the financial information of a customer on receiving a request from another entity.
These are the entities that collect information of the users from the providers for market evaluation, customer analysis, etc. This includes both organizations and individuals. These are regulated by regulatory authorities like, SEBI, IRDA, RBI and PFRDA.
As per the RBI master directions, financial information includes the following:
Eligibility Requirements:
Procedure:
RBI can cancel the registration of the NBFC AA in case of any of the following circumstances:
The responsibility of NBFC AA is laid down below:
Consent is essential in the business of an NBFC-AA. Without the consent of the customer, NBFC-AA can neither retrieve, nor share or transfer any financial data of the customer. The concept of NBFC AA was introduced to help people get a consolidated view of their financial holdings that is spread across different financial sector regulators. With NBFC AA License, the credit approval and sanction process for lending becomes much more efficient.
Read our article:NBFC Collaboration with the Financial Entities
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