Tag: RBI on Account Aggregators

The recently announced Account Aggregator (AA) system will help access and share financial data across institutions.

While the ecosystem is seen to be a game changer, a few challenges are likely to be faced by the banking industry. Reserve Bank of India deputy governor Rajeshwar Rao highlights some:

1. RBI‘s objectives : Though RBI’s intent has been well received, a good piece of regulation will come to naught if the desired objectives of the central bank such as – data security, large user base, willingness of adapting such a system – are not met.

Also read : Account Aggregator System – how will it work?

2. Adhering to norms : The system will function optimally only when a variety of customers’ accounts maintained across different financial entities cutting across financial sector regulators are linked to the AA. For this to happen, the Financial Information Providers (FIPs) need to see value in the framework. The RBI has also created the launch pad for the system, by first creating a regulatory framework, and then prescribing the ‘Technical Standards’.

Also read: All you need to know about Account Aggregators!

3. Nascent stage : Rao points that the AA is still at a nascent stage of development. However, given the view of around data security and most people’s apprehension towards it, he said that it has become an imperative to ensure that the growth is orderly. As the system grows, newer business models and customer offerings will pour in. While RBI is open and encouraging to innovation, there is a need to maintain balance between innovation and spirit of the AA regulatory structure.

Also read : Here are top 5 things account aggregators can do