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Account aggregator and ONDC will together make supply chain more efficient: Nandan Nilekani

The architect of Aadhaar believes that new public technologies will see a major take-off like the UPI in about 5 years

August 16, 2022 / 12:12 PM IST

The Account Aggregator system and Online Network for Digital Commerce (ONDC) will together help create a more efficient supply chain in India, Infosys Chairman Nandan Nilekani told Moneycontrol’s Chandra R Srikanth in an interview aired on August 15.


“You have to see what happens together. ONDC gives the infrastructure to unbundle the supply chain. Credit through AA allows everyone in the supply chain access to formal credit. So, they no longer depend on the next guy in the supply chain to give them credit,” said the technocrat.


“Both these together are going to create a far more efficient supply chain. It will take five years (to take off in a big way),” he added.


Nilekani has earned the moniker of India’s Chief Technology Officer as a consequence of having played a pivotal role in the development of public technologies like Aadhaar and the united payments interface (UPI). Moreover, the guardrails of the ONDC were built by the Nilekani-backed Beckn Foundation.


When asked about how long it will take for the ONDC and AA models to take off, he said, “ It will take five years… Our experience of such tech is that it takes years to put the building blocks in place. And then market forces or a black swan event happens and they take off.”


While ONDC seeks to make different parts of the industry’s supply chain interoperable with each other, the AA ecosystem facilitates sharing of financial information on a real-time basis between regulated entities.


“ONDC has natural demand. I am very pleasantly surprised by the demand for ONDC. It's an idea whose time has come. Everybody wants to be part of it. Small retailers are delighted that there's going to be a way for them to participate in the global digital ecommerce world. It is going to give a big boost to hyper local commerce, quick commerce,” said Nilekani.


“Suppliers are delighted because they can list the products on ONDC and any consumer app can order it. Delivery companies are very happy because they will get a higher number of delivery packages. So, everybody wins. I think just market momentum will drive this. Like everything else built in India, it is going to be a high volume, low cost, low transaction fee kind of model,” he added.


Moneycontrol reported earlier this month that AA ecosystem has got a major boost as all the public sector banks (PSU banks) in the country have onboarded the platform, according to a tweet by Sahamati, a non-profit collective of the framework, bringing over 1 billion accounts on the AA framework.


While many private sector and some public sector banks had gone live on the AA framework, some of India’s largest PSU banks including State Bank of India (SBI), Canara Bank, Punjab National Bank (PNB) and Indian Bank among others, were yet to onboard the platform until July. Finance minister Nirmala Sitharaman had reportedly instructed these banks to go live on the AA framework by the end of July.


“The credit for that has to go to the government. The finance minister, the prime minister, everybody have been very, very supportive. We have 1.1 billion accounts now on account aggregator,” said Nilekani.

“Now, we need to increase the volume of requests or consent, people asking for data, that will build. Account aggregators will democratise credit, among other things, but the biggest thing is that millions of small businesses will get access to credit,” he added.

Deepsekhar Choudhury Deepsekhar covers tech and startups at Moneycontrol. Tweets at @deepsekharc
first published: Aug 16, 2022 12:12 pm