Page 43 - Banking Finance January 2024

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individuals and businesses access and share their financial Operation of Prepaid Payment Instruments in India" in
data with various institutions. October 2017. These guidelines set forth the regulatory
framework for Account Aggregators, clearly defining
Here is a brief history of Account Aggregators their roles and responsibilities and establishing the
in India: operational guidelines for their functioning.
2016-2018: The Genesis and Initial Develop- In 2018, the RBI released a framework for Account
Aggregators and invited applications for licenses.
ment
The idea of Account Aggregators was initially 2020: First Set of Account Aggregator Licenses
introduced by the Reserve Bank of India (RBI) in the
"Report of the Committee on Comprehensive Financial In 2020, the RBI granted the first set of licenses to four
Services for Small Businesses and Low-Income entities to operate as Account Aggregators: CAMS
Households," commonly known as the Nachiket Mor Finserv, Cookiejar Technologies Pvt Ltd (Finvu), Finbox
India Private Limited and NESL Asset Data Limited.
Committee report, released in December 2013. This
These entities started collaborating with financial
report emphasized the necessity for an account
institutions, such as banks, mutual funds, insurance
aggregator framework to rectify the prevailing
disparities in the financial landscape. It specifically companies, and pension funds, to enable the seamless
underlined the significance of streamlining the sharing of financial information with the consent of the
procedure for obtaining financial data with the goal of users. The primary objective was to facilitate easy access
enhancing credit accessibility for disadvantaged and to financial services, credit, and other financial products
underprivileged populations. for individuals and businesses. These companies were
tasked with developing and offering AA services to
In 2016, the Reserve Bank of India (RBI) established a individuals and businesses to enable them to access and
working group with the aim of offering share their financial data with their consent.
recommendations related to the operational and
regulatory framework for Account Aggregators. This As the ecosystem developed further, an increasing
working group subsequently submitted its report in the number of entities showed interest in becoming Account
same year, providing a comprehensive outline of the Aggregators, resulting in the expansion of this sector.
fundamental principles and structure governing Account Users also embraced the Account Aggregator
Aggregators. In 2017, the RBI took further steps by framework, appreciating the enhanced control it
releasing a consultation paper to solicit public feedback offered over their financial data.
on the concept of Account Aggregators and the 2021 and Beyond: Wider Adoption
potential regulatory framework surrounding them.
On 2nd September 2021, the Account Aggregator (AA)
Building upon these recommendations, the RBI went
framework was introduced in India by the Reserve Bank
on to issue the "Master Directions on Issuance and
of India (RBI) with the application in eight major Indian
banks. These banks include Axis Bank, Kotak Mahindra
Bank, ICICI Bank, State Bank of India, IDFC First Bank,
HDFC Bank, Federal Bank and IndusInd Bank.
As of date there are 14 AAs with Operating NBFC-AA
License and 3 with in-principle approval.
As of date in total 85 FIPs are live on the AA interface,
which includes 27 Banks, 31 RRBs, 18 insurers, 3 CRA
(Central Record keeping Agencies), 2 depositories, 2
RTA (Registrar and Transfer agents), and government
institutes like GST.
Following is the chart depicting Cumulative Count of
Accounts Linked by Account Holders from Aug 2021 to
October 2023

38 | 2024 | JANUARY | BANKING FINANCE