Former UIDAI chairman Nandan Nilekani introduced the Account Aggregator to give individuals and small businesses more control over their digital data.
Sahamati, a body which will promote the Account Aggregator ecosystem, will be headed by BG Mahesh, one of the earliest internet entrepreneurs in India who also founded OneIndia.com. The account aggregator is based on a new class of non-banking financial institutions called the account aggregator (NBFC-AA) model.
The Reserve Bank of India (RBI) is planning to make bank account operations, including mutual fund, insurance and provident fund businesses, paperless through the account aggregator (AA) app. This will give individuals greater control over how their data is being used, while also reducing the need for them to visit multiple bank branches.
Sahamati will work towards accelerating the adoption of the framework by building awareness about the new technology and supporting implementation and integration through various workshops.
The aggregator will obtain data from multiple service providers and deliver it via consent-based channels to financial information users. This will be used in the financial sector first, followed by telecom, healthcare, and other sectors.
"Thanks to AA and other digital infrastructure that we built, India will become a leader in empowering individuals and small businesses with their own data," said Nilekani.
The non-profit will apply for the self-regulatory organisation (SRO) licence with the RBI, which is expected by the year-end, allowing the companies to start offering the services. The license will also give it the status of a self-governing body, allowing it to work on a code of conduct and best practices for member organisations, Mahesh told The Hindu BusinessLine.
SBI Chairman Rajnish Kumar believes that the use of account aggregators could lead to cost efficiency. This can be shared with the customer in terms of a lower rate of interest.
The central bank in 2016 had approved a new class of Non-banking Financial Companies (NBFCs), including four major financial regulators RBI, SEBI, IRDA and PFRDA, to act as Account Aggregators. Their responsibility is to transfer a client's data without storing it. Acting like consent brokers, the AAs can make money out of this transaction without being able to read the data.