Following the finance minister’s nudge, all the 12 public sector banks have joined the account aggregator (AA) framework, bringing in its fold over a billion accounts. Major private sector banks are already live on the AA ecosystem, which was launched to bolster the lending ecosystem.
According to Sahamati, an industry alliance for the AA ecosystem, as many as 22 major private sector and public sector banks (PSBs) have gone live on the framework since its launch in September last year.
“1.1 billion accounts, including all major public and private bank accounts, are now live on India’s Account Aggregator. A seminal moment for the world’s largest open banking ecosystem. This will unleash India’s next wave of financial inclusion & fintech innovation,” Sahamati said in a tweet.
However, many PSBs have gone live with just one AA and it is important for these entities to go live with other AAs that have received approval from the RBI. The central bank has approved six AAs, and given in-principle approval to eight more entities.
B G Mahesh, co-founder and CEO, Sahamati, said, “Until now, we have been focused on getting the banks and lately the PSBs to go live as financial information providers (FIPs) because it allows citizens to share their financial data in a safe manner with financial information users (FIUs). We will support all efforts by FIUs to integrate their products with the AA framework, and also support ongoing efforts by FIPs to enable citizens to choose the AA they would like to use as their consent manager.”
The AA framework will see the GST Network go live in a few months. And work has begun with Sebi entities, insurers and pension funds to include them in the ecosystem.
“So far, we were working on educating the entities on the benefits of joining the AA ecosystem. Now we need to work on citizen awareness to educate them why they should use AA as the only route to share their financial data,” Mahesh said.
Account aggregators are essentially licensed non-banking financial companies (NBFCs) that enable instant exchange of financial data between FIP and FIUs. This is with the explicit consent of customers.
Around 0.97 million accounts have been linked to the ecosystem so far; around 0.93 million consents have been given during the same period.
Besides the banks, as many as 23 NBFCs have gone live as FIUs in the AA framework. They are the likes of Bajaj Finance, Piramal Capital & Housing Finance, and Tata Capital. A few insurers such as HDFC Life, Bajaj Allianz Life and Max Life are also in the AA ecosystem.
“Access to trustable data is a barrier to mass access to credit products and financial inclusion. The AA ecosystem hits the trifecta of information needed for credit ecosystem — KYC support, income and payment capacity assessment, and risk profile. No single source of data provides better coverage than this for democratising credit,” said Amit Das, CEO and co-founder, Think360.ai.