As many as eight major public sector banks (PSBs), including State Bank of India (SBI), have joined the account aggregator ecosystem in some form or the other as the deadline set out by the finance minister is ending soon. The remaining four are still in the testing phase and are expected to join the ecosystem soon.
According to the information put out by Sahamati, an industry alliance for the account aggregator ecosystem, Canara Bank, Bank of India (BoI), Indian Bank, Punjab National Bank, Union Bank of India, SBI, Bank of Maharashtra and UCO Bank have gone live on the ecosystem.
While a majority of the PSBs have joined the ecosystem, many of them, including SBI, BoI and UCO Bank, have listed the service in the production environment of the registry. However, it is still not available for citizens to use.
Canara Bank and Indian have both gone live as a financial information provider (FIP) and financial information user (FIU). The remaining four PSBs, which are still in the testing phase, are Bank of Baroda, Central Bank of India, Punjab & Sind Bank and Indian Overseas Bank.
Finance minister Nirmala Sitharaman held a meeting with heads of PSBs and regional rural banks in early July to review operational and governance reforms of regional lenders. During the meeting, Sitharaman had instructed PSBs to get on board the ecosystem by the end of July.
Even as PSBs go live on the ecosystem, their executives have said this will result in a complete overhaul of their systems.
To benefit from the system, they have to develop the capacity to work round-the-clock over a period of time. This is to tap business from millennials or they may lose out.
Major private banks such as HDFC Bank, ICICI Bank, Axis Bank, IndusInd Bank, Kotak Mahindra Bank and Federal Bank have been the early ones to get on board the ecosystem. So far, there are nine private sector banks which have gone live.
Account aggregators are essentially licensed non-banking financial companies (NBFCs) that enable instant exchange of financial data between FIP and FIUs. This is with the explicit consent of customers.
The ecosystem went live in September last year with an aim to democratise credit delivery and bolster the lending ecosystem.
Around 0.91 million accounts have been linked to the ecosystem during the last 11 months. And, around 0.86 million consents have been given during the same period.
Besides 18 banks, including PSBs and private lenders, being live on the ecosystem, more than 20 NBFCs are also live on it. They are the likes of Bajaj Finance, Piramal Capital & Housing Finance, and Tata Capital financial services.
Experts said as more and more banks get onboarded, more tech-led NBFCs will join the ecosystem. Among insurers, Bajaj Allianz Life and Max Life are in the ecosystem while many are still in the testing phase.
Sahamati is now working with Securities and Exchange Board of India (Sebi) entities to get them onboarded. It has also started work with large insurance firms. Sahamati is also talking with the GST network. And, initial discussions have taken place with Life Insurance Corporation (LIC) as well.
So far, there are six account aggregators operating in the system that have received Reserve Bank of India’s (RBI) approval. Eight more have got in-principle nod from the regulator.