Walmart-owned PhonePe on August 26 said it has received in-principle approval from the Reserve Bank of India (RBI) to operate as an Account Aggregator (AA).
The company said licence permits PhonePe to launch its AA platform that will enable the free and instant exchange of financial data between the Financial Information Users (FIUs) and Financial Information Providers (FIPs) with due consent from customers, in a safe and secure manner. This will help Indian consumers avail financial services in a faster, cheaper and more convenient manner.
Rahul Chari CTO and Co-founder of PhonePe said, “The Account Aggregator licence will allow us to play a pivotal role in shaping the emergent Account Aggregator ecosystem for consent-based financial data sharing."
"Our AA technology stack will enable any Financial information user (FIU) to instantly retrieve financial information with customer consent from the Financial information provider (FIP). We are looking forward to working closely with all the industry stakeholders to take forward RBI’s vision of driving deeper financial inclusion across the country,” he added.
Financial data of customers is spread across banks and other institutions, each having different methods and platforms to access our information. Account aggregation solves this issue by compiling data from multiple accounts under one roof. This may include deposits, investments, insurance policies, pension schemes etc.
In 2016, RBI approved a new class of licensed NBFCs to provide account aggregation services based on a customer’s explicit consent. AAs are regulated by RBI, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA) and are purely information technology-driven. This means they cannot store any data and can only facilitate the real-time exchange of data.
AAs enable FIPs like banks, AMCs, pension funds, among others to share data with FIUs or entities that consume this data. There are four licensed AAs functioning currently – CAMSFinServ, Cookiejar Technologies, FinSec AA Technologies and NSEL Asset Data. Apart from PhonePe, the players who have received in-principal approval are Perfios Perfios Account Aggregation Svcs and Yodlee Finsoft.
Currently, around 12 banks and institutions are at various stages of implementing the FIU and FIP framework. This includes State Bank of India (SBI), HDFC Bank, ICICI Bank, LendingKart among others.
