The Reserve Bank of India (RBI) has called applications for a self-regulatory organization (SRO) for the Account Aggregator (AA) ecosystem.

Introduced in September 2016, the account aggregator framework facilitates the exchange of financial information between various entities. The framework involves non-banking financial company-Account Aggregators (NBFC-AAs) acting as intermediaries between financial information providers (FIPs) and financial information users (FI-Us).

In its notification, the central bank said that the interested parties should apply through the PRAVAAH portal before June 15.

“The AA ecosystem is distinct in its complexity, involving the exchange of data among a diverse array of regulated entities (REs) operating under varied regulatory environments. This complexity necessitates frequent coordination among these REs to address various operational issues such as dispute resolution, standardized agreements and common services,” the RBI said.

"Given its inherent diversity and to support its smoother adoption and stabilisation, it is desirable to have a dedicated Self-Regulatory Organisation for the Account Aggregator ecosystem (SRO-AA)," it added.

These FIPs and FIUs fall are regulated by various bodies, including the RBI, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, and the Pension Fund Regulatory and Development Authority of India. The revenue department is also deemed the regulator for the Goods and Services Tax Network within this ecosystem.

The SRO-AA will operate within the existing regulatory framework for the AA ecosystem, the central bank said. While the technical specifications will continue to be framed and published by Reserve Bank Information Technology Private Limited (ReBIT).

The RBI already has SROs for microfinance institutions and fintech companies. Last year, the regulator recognized the Fintech Association for Consumer Empowerment (FACE) as SRO in the fintech Sector (SRO-FT).

According to Sahamati -- an industry alliance for the Account Aggregator ecosystem in India; and which is expected to apply for the SRO-AA, around 17 companies have received the NBFC-AA licence. 

However, in February, PhonePe decided to exit the account aggregator business and surrender its NBFC-AA licence, citing a shift in focus to other business areas and a plan to partner with existing aggregators. If the industry is to be believed, few others may also look at surrendering their licence.