Account Aggregator

• Securities and Exchange Board of India (SEBI) has released a proposal aimed at improving the safeguards within the account aggregator (AA) framework in securities markets to counter scams and mis-selling.

ABOUT ACCOUNT AGGREGATOR

• An AA is a framework that simply facilitates sharing of financial information in a real-time and data-blind manner (Data flow through AA are encrypted) between regulated entities (Banks and NBFCs).
• The RBI (Reserve Bank of India) in 2016 approved AA as a new class of NBFC (Non Banking Financial Companies), whose primary responsibility is to facilitate the transfer of user’s financial data with their explicit consent.
• AAs enable flow of data between Financial Information Providers (FIPs) and Financial Information Users (FIUs).
• The Draft Data Empowerment and Protection Architecture (DEPA) framework released by NITI Aayog serves as the foundation for AA’s architecture.
  • DEPA is an architecture that lets users securely access their data and share the same with third parties.
• In AA, data cannot be shared without the consent of individual.
• AA system can make lending and wealth management a lot faster and cheaper.
• Registering with an AA is fully voluntary for consumers.