The Reserve Bank of India (“RBI”) has amended the Master Direction – Non-Banking Financial Company – Account Aggregator (Reserve Bank) Directions, 2016 (“Master Direction”) to bring in the following changes:
- The present amendment has incorporated a new provision (Paragraph 1A) to inform that under the regulatory structure for NBFCs, NBFC-Account Aggregators will always remain in the Base Layer of the regulatory structure.
- The present amendment states that NBFC-AAs should make use of the ‘Guidance Note on Operational Risk Management and Operational Resilience’ dated April 30, 2024, as amended from time to time.
- Instead of Ombudsman Scheme for Non-Banking Financial Companies, 2018, NBFC-AAs have to comply with the directions provided under the Reserve Bank – Integrated Ombudsman Scheme, 2021.
- Considering need for professional experience in managing the affairs of the NBFC-AA, the present amendment mandates that at least 1 of the directors of NBFC-AAs should have relevant experience of having worked in a bank/NBFC.
- Presently, to manage the integrated risk, an Account Aggregator has to form a Risk Management Committee consisting of minimum 3 members of its Board of Director. The present amendment brings more clarity to this requirement and states that such Risk Management Committee has to be formed either at Board of executive level.
- With the present amendment gaining effect, NBFC-AAs have to comply with the disclosure requirements specified in Section I of Annex VII of the Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023(read with General instructions for such disclosures contained in Annex VII), as amended from time to time.
Please note, these disclosures are in addition to and not in substitution of the disclosure requirements specified under other laws, regulations, or accounting and financial reporting standards. More comprehensive disclosures than the minimum required are encouraged, especially if such disclosures significantly aid in the understanding of the financial position and performance.
Please refer to the hyperlink below for a detailed read of the updated Master Direction.
Source: Reserve Bank of India
