MUMBAI:The account aggregator (AA) framework, regulated by the Reserve Bank of India (RBI), can significantly simplify financial tracking for smaller companies and individuals, according to BG Mahesh, chief executive of Sahmati, at the Mint Digital Summit 2024. Sahmati is a member-driven industry alliance dedicated to promoting and strengthening the AA system.
“In offline, the cost of processing a file is high. It’s as high as about ₹700,” Mahesh said. “In AA, to do the same thing, (the cost) would be about ₹70-80.”
Mahesh emphasized that financial data from regulated entities can only be accessed with the individual’s consent. Addressing data safety concerns, he highlighted that the AA framework operates under the Digital Personal Data Protection (DPDP) Bill, ensuring that all shared information is consensual and the purpose and duration of data processing are clearly declared.
Launched around three years ago by the RBI, the AA framework is a financial data-sharing system aggregating a customer’s financial information in one place.
It is not only helping individuals to view all their savings in one place and track their spending habits, but it is also enabling banks to sanction loans to customers who are yet to build their credit history.
The AA framework enables the retrieval of financial data from entities regulated by the RBI, Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, and the Department of Revenue under the finance ministry.
This data can be shared with other regulated entities with the individual’s consent. Mahesh pointed out that the AA framework outperforms traditional methods like scanned documents, digital PDFs, and net banking in terms of tracking reliability.
Mahesh also noted the growing adoption of the AA framework, with 500-600 entities already live, around ₹43,000 loans disbursed using AA technology, and 2.15 million accounts enabled with this feature.
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Published: 24 May 2024, 10:12 PM IST