Account Aggregator Ecosystem gets cross-sectoral with SEBI entities as Financial Information Providers

20 Aug 2022

August 19, 2022: SEBI has on 19th August, released an enabling circular, which allows SEBI entities Depositories and AMCs through their RTAs (Register and Transfer Agents) to take part in the AA Framework as a FIP. The circular mandates the FIPs to share data in response to consent requests received from any of the RBI licensed Account Aggregators. As FIPs will be integrated with all Account Aggregators, citizens will be able to use an  Account Aggregator of their choice to act as their consent managers.

This paves the way for the Account Aggregator system to become cross-sectoral, which till date has been adopted by 21 banks, including all public sector banks, with more than 1.1 billion bank accounts enabled on Account Aggregator. Once SEBI entities go live as Financial Information Providers (FIP), it would mean that information related to demat accounts and mutual funds holdings of the customer would be available to be shared through Account Aggregator with explicit consent of the customer.

This would mean statements of 81 million demat account holders with two depositories (NSDL and CDSL) and 135.6 million mutual fund folio accounts with RTA ( Registrar and Transfer Agents) will be available to be shared digitally and real time with explicit consent of customers through Account Aggregators. With depositories and RTAs going live on AA as FIPs, the total number of accounts enabled on AA is expected to increase from the current 1.1 billion bank accounts to 1.3 billion bank accounts, demat accounts and mutual funds.

Enabling the data related to demat accounts and mutual funds on AA is expected to ease off the process of integrated financial planning and advisory which in turn should encourage more investors and customers to look at widening their investment portfolio. “While most of the world is familiar with OpenBanking we believe the cross-sectoral reach of India’s Account Aggregator framework is very powerful and is often referred to as OpenFinance rather than just OpenBanking”, said B.G. Mahesh, CEO & Co-founder, DigiSahamati Foundation, an alliance of account aggregator ecosystem.

Account Aggregators are a special class of NBFCs regulated by RBI through their Master Guidelines in 2016, which were an outcome of joint deliberations with the other three financial sector regulators including SEBI, IRDAI and PFRDA. The Framework is designed to work cross-sectorally and empower the citizens to access, manage and allow sharing of their financial information with their explicit consent from their existing financial services providers to new service providers.

This is an incredibly great move by SEBI to bring the investments under the FIP framework of Account Aggregator. With AMCs, RTAs & Depositories now joining Banks on Account Aggregator, for consumers this unlocks opportunities in financial planning like never before. Personally I feel this is equivalent to UPI unlocking Payments, now we have a chance to bring informed Financial Planning & Literacy to masses in India.said Pravin Jadhav, Founder of Raise Financial Services that operates technology led Stock Trading & Investment platform – Dhan


Anuj Kumar, Managing Director, CAMS commentedThe Account Aggregator model is poised to make a difference to the rapid financialization taking place in the country and Capital market’s participation in the AA ecosystem is a seminal step that will further strengthen the foundation of the AA market place in India. As the largest RTA serving nearly 70% of the Mutual fund industry’s assets and over 70 million folio accounts, we are very excited with this recent impetus to AA architecture which will open new vistas for all stakeholders to leverage the power of comprehensive view of financial information that lie in silos with consent based sharing of financial information. CAMS and its Account Aggregator business entity CAMSFinserv have begun engaging with the capital market participants to introduce the potential of the AA system for reimagining the offerings to their customers and with SEBI’s firm direction to these entities to onboard the system, there will be definitive momentum to the AA platform adoption.