Among large private sector lenders, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and IndusInd Bank are live on the AA system
Illustration: Ajay Mohanty
The Account Aggregator (AA) ecosystem, which went live in September last year, aiming to transform how credit is processed and accessed in the country, has seen nine lenders go live on it, all of which are from the private sector. Having said that, five of 12 public sector lenders are working with their technology service providers to go live. The AA ecosystem’s aim is to onboard more and more banks into the ecosystem and reach out to other financial sector players, such as insurance companies, going forward.
“Of the 12 public sector banks in the country, five are actively working on joining the account aggregator system. They are working with their technology service providers to have it implemented,” said BG Mahesh, co-founder & CEO of Sahamati, a not-for-profit company and an Industry Alliance for the account aggregator ecosystem. The five banks are State Bank of India, Union Bank of India, Bank of Baroda, Punjab National Bank, and Canara Bank.
“Going forward, our priority is to get more banks into the ecosystem, and with each bank who has gone live, we will work with them to implement this across products. We also want to go across sectors in a big way, starting with the insurance companies. In the last few weeks, we have met 4-5 insurance companies who have already started their implementation and one of them is about to go live. The insurance sector is very committed and bullish on the AA system,” said Mahesh.
Among large private sector lenders, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, and IndusInd Bank are live on the AA system. Other banks such as Federal Bank, IDFC First Bank, AU Small Finance Bank, and Karur Vysya Bank are live on it. And, so far, the lenders which have gone live on the AA ecosystem have disbursed loans worth Rs 250 crore through the AA framework across auto and small business loans.
About 248,000 accounts have been linked to the AA system by account owners across financial Information Providers (FIPs) and around 230,000 consent requests have been fulfilled across financial information users (FIUs), according to data by Sahmati. The AA system has seen a week-on-week growth of 10 – 15 per cent.
Account aggregators are essentially licensed non-banking finance companies that enable instant exchange of financial data between FIPs and FIUs with the explicit consent of customers. There are five AAs with an operating licence, including CAMSFinserv, Finvu, OneMoney, NESL Asset Data, and Anumati. Five other AAs have received in-principle from the Reserve Bank of India (RBI), which includes PhonePe, NSDL E-governance, Tally, Yodlee Finsoft, and CRIF Connect.
“This is a new digital public good framework… the journey has started and over time the entire financial sector will embrace the AA framework,” Mahesh said. “The banks initially will integrate a few products and ensure that there is no friction after which they will look to implement across all the products,” he added.