In March 2025, the Reserve Bank of India (RBI) introduced a new framework for the recognition of a Self-Regulatory Organisations (SROs) for the Account Aggregator (AA) ecosystem. The framework has outlined the key characteristics, responsibilities, eligibility criteria, and governance aspects of SRO-AA.
- RBI has clarified that SRO-AA will operate within the existing regulatory framework for the AA ecosystem, while, technical specifications will continue to be framed and published by Mumbai (Maharashtra)-based Reserve Bank Information Technology Private Limited (ReBIT).
- The interested and eligible parties are required to apply through PRAVAAH (Platform for Regulatory Application, VAlidation and AutHorisation) portal before June 15, 2025.
Note: An SRO is a non-governmental body that frames and enforces rules and standards relating to the conduct of entities in the industry (members).
Framework for SRO-AA:
i.As per the new framework, it is mandatory for SRO-AA to be set up as a not-for-profit company registered under Section 8 of the Companies Act, 2013.
ii.The eligible entity is required to maintain at least net worth of Rs 2 crore within 1 year after recognition as an SRO-AA by the RBI, or before starting of operations as an SRO-AA, whichever is earlier.
iii.The eligible entity should not hold 10% or more of its paid-up capital either singly or acting in concert.
iv.The entity should have capability and resources for a robust Information Technology (IT) infrastructure and the ability to provide technological solutions within a reasonable timeframe.
v.SRO-AA has been mandated to have at least 25 unique entities each from Financial Information Providers (FIPs) and Financial Information Users (FI-Us) as its full-time members.
About AA System:
i.It was originally introduced in 2016, which provides secure exchange of financial data between FIPs and FI-Us.
ii.FIPs and FI-Us come under the purview of various financial sector regulators such as: the RBI, the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority of India (PFRDA) and the Department of Revenue(DoR) under the Ministry of Finance(MoF) for Goods and Services Tax (GST) Network.
Recent Related News:
In February 2025, RBI imposed restrictions on Mumbai (Maharashtra)-based New India Co-operative Bank Limited from issuing new loans and suspended deposit withdrawals amid supervisory concerns about its financial position.
- These restrictions were issued by RBI under Section 35A of the Banking Regulation Act, 1949, to protect the interest of depositors.
