Bank account opening, operating to go paperless; RBI’s new project has this in store

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Updated: Aug 01, 2019 6:01 PM

Aadhar architect Nandan Nilekani gave an introduction to Account Aggregator via which, the Reserve Bank of India plans to make bank account operations paperless.

RBI expected to pause its rate cut cycle According to Dun & Bradstreet ReportThe Account Aggregator (AA) model — will be deployed in the financial sector first.

Aadhar architect Nandan Nilekani gave an introduction to Account Aggregator via which, the Reserve Bank of India plans to make bank account operations paperless. With the new application, individuals and small businesses can share their digital financial data with third parties in a safe and secure manner. This will give them greater control over how their data is being used. The Account Aggregator (AA) model — will be deployed in the financial sector first, “while the approach can be later applied to telecom, healthcare, and other sectors,” the statement released by Sahamati said. The work for the AAs started when four major financial regulators RBI, SEBI, IRDA and PFRDA, came together and the AA model about four years in the making. The four regulators allowed regulated entities under their control to share data with user consent. 

Using the account aggregator, a user in the need of a loan will be able to quickly share bank statements and other details required by lending institutions, digitally. This can be done through their choice of preferred Account Aggregator. Users who need financial planning services will also be able to share details of mutual fund, insurance, provident fund and banking details digitally through the AA app. The AA model is equipped to seamlessly obtain data from multiple service providers and deliver the same by consent-based channels to financial information users.

With this, the customers will no longer be required to physically visit multiple branches for purposes of collecting data, sharing confidential login ID details, or logging-in to multiple sites on their own to download and collate information before sharing it. Further, the AAs are secure in the manner that they cannot read the data.  Also, it is not allowed for them to resell it. AAs can only make money through the transactions.

Announcing the same, Nandan Nilekani, former Chairman of UIDAI said, “If Indians can leverage their footprints to get better loans and other financial products, we will have taken a step towards true data empowerment. 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.”

  • The story was first published on www.financialexpress.com on July 25, 2019. 

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