The Account Aggregator (AA) framework has seen more than eight-fold spurt in the number of bank accounts linked across the last 20 weeks.
Context
The Account Aggregator (AA) framework has seen more than eight-fold spurt in the number of bank accounts linked across the last 20 weeks.
What is an Account Aggregator (AA)?
- The account aggregator, simply put, facilitates sharing of financial information in a real-time basis between regulated entities.
- AAs are licensed by the Reserve Bank of India to enable the flow of data between Financial Information Providers (FIPs) and Financial Information Users (FIUs).
- FIPs are institutions that hold customer data and FIUs are entities that consume data to offer better service, underwrite loans, etc.
- An AA is data blind and only receives encrypted data which is decrypted only by the FIU.
What can be linked to AAs?
- As of now, only individual current and savings accounts and deposits can be linked to AAs.
- The huge pool of small and medium enterprise (SME) accounts and asset classes like securities, insurance and mutual funds need to be opened up to AAs.
The growing numbers
- According to data by Sahamati, the not-for-profit self-organized collective for the AA ecosystem, the number of linked bank accounts has gone up from 10,000 in the second week of September 2021 to 80,000 now.
- The ecosystem has fulfilled 67,000 consent requests till date.
Which banks are on board currenlty?
- Six banks are live on the ecosystem, including Axis Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank and IndusInd bank.
- Eleven more NBFCs and investment advisors too are live as FIPs and FIUs.
- The ecosystem is still waiting for India’s largest lender, the State Bank of India (SBI), to go live.
- SBI, however, is working on a pricing model because the bank wants to be compensated as it will be the largest information provider.
- Once SBI goes on board, other large public banks too will follow suit.
