In a major development, the Goods and Services Tax network (GSTN) has been included to the account aggregator (AA) network as a financial information provider (FIP) to facilitate cash flow lending to the micro, small, and medium enterprises (MSMEs), the Reserve Bank of India (RBI) said on Wednesday.
The AA network had been in discussion with the GSTN network for their onboarding for a long time as this would give financial institutions access to data regarding small businesses, which would help them to extend loans to such businesses.
As per Sahamati, an industry alliance for the AA ecosystem, all major public sector banks and private sector banks are live on the network and many large non-banking finance companies (NBFCs) have also gone live.
Recently, the Insurance Regulatory and Development Authority of India (Irdai) has asked the FIPs in the insurance sector to enter into a contractual framework with AAs. Even the market regulator – Securities and Exchange Board of India (Sebi) — has directed stock market intermediaries such as asset management companies (AMCs) and depositories to join the AA network.
Launched in September 2021, account aggregators are licensed NBFCs that enable instant exchange of financial data between FIP and FIUs. They are responsible for providing services that include the transfer — but not storing — of a customer’s data.
So far, there are six AAs in India with operating licenses and nine AAs with in-principle approval from RBI.
As per the latest data, around 2.47 million cumulative accounts have been linked to the AA network while 2.5 million cumulative counts of consent request have been successfully fulfilled.