Do you fear loan rejection? Well, there's a new fintech app for you that will keep a check on timely bill payments and offers a loan accordingly.
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The Centre recently launched a new financial data sharing system called as the ‘Account Aggregators’ (AA) network which embodies the ability to modify the financial data sharing system specifically with respect to investment and credit.
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The government called it as the first step towards bringing open banking in India and empowering millions of customers to digitally access and share their financial data across institutions in a secure and efficient manner.
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An account aggregator is a system or entity that comes under the purview of the Reserve Bank of India (RBI). This entity comes with an NBFC-AA licence as well.
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Primarily, account aggregator is like an entity that enables financial data sharing from Financial Information Providers (FIPs) to Financial Information Users (FIUs), based on the consent from the customers.
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The AAs will aid customers to access personal financial information via digital media in a secure way. The details can also be shared further from one financial institution to another in the same AA network.
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The aggregator aims to help individuals and small businesses in procuring loans from banks without any hassle by digitally sharing financial data across institutions.
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The AA network allows sharing transaction details and/or bank statements from savings/deposit/current accounts in encrypted format by sender and can be decrypted only by the recipient.
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The AA system kickstarted this month with eight banks and the govt believes it can make lending and wealth management a lot faster and cheaper. It will also save customers the effort of sharing physical signed and scanned copies of bank statements etc.
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As per the govt, the AA framework will eventually make all financial data available for sharing, including tax data, pensions data, securities data and insurance data.
Published: September 19, 2021, 14:55 IST
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