Taking loan, getting insurance now easier with RBI’s account aggregator

The Reserve Bank of India (RBI) has launched the account aggregator (Sahamati Platform) service through which the customers will not need to do Know Your Customer (KYC) for taking loans, getting insurance or investing in mutual funds. RBI’s deputy governor M Rajeshwar Rao said last week that the account aggregator ecosystem in the nation is in a nascent stage and there is a need for its orderly growth. “The account aggregator ecosystem is still in a nascent stage of development. But given the sensitivity of the platform on account of the nature of data handled by it, it becomes imperative to ensure that the growth is orderly,” Rao said while speaking at iSPIRIT Foundation event last Thursday, according to news agency PTI.

What is an account aggregator?

The account aggregator platform allows the collection of user data with their consent and is shared among financial institutions. This allows the institutions to build a better understanding of potential customers and custom their services accordingly.

Customer consent required

State Bank of India, ICICI Bank, Axis Bank, IDFC First Bank, Kotak Mahindra Bank, HDFC Bank, IndusInd Bank and Federal Bank have planned to share customer data with the account aggregator network. This will also help banks and other financial institutions to get new customers. However, for sharing customer data, the bank or financial institution will have to take their consent, reports news agency PTI.

Data security

The RBI has prepared stringent data privacy guidelines for the account aggregator. At the same time, the data that banks will share with the account aggregator will be completely encrypted.

Aim of account aggregator

RBI deputy governor Rao said that the larger goal of the account aggregator is to empower customers and reduce information asymmetry. It is aimed at ensuring that the customer has full control over the information that is being shared through the account aggregator.