PhonePe gets Account Aggregator license from RBI
AA also improves the availability of financial services and competition as the customer no longer has to depend on one provider
The Reserve Bank of India (RBI) has given an in-principle approval to PhonePe to operate as an Account Aggregator (AA), the Times Of India, reported on Friday. Earlier, entities like Cookiejar Technologies, Finsec AA Technologies, NESL Asset Data, and CAMSfinserv have received an AA license from RBI. PhonePe said that they are working closely with industry stakeholders to drive deeper financial inclusion across the country.
AA improves financial services availability and competition
Launched in 2016 by the RBI, an Account Aggregator (AA) enables one set of financial entities to obtain customer information residing with another set through its platform, once the customer gives consent. It also improves the availability of financial services and competition as the customer no longer has to depend on one provider.
The entities where the customer already holds an account are banks, insurance companies and mutual funds. They are called as Financial Information Providers (FIPs), and can also act as Financial Information Users (FIU). The GST department will also participate as an FIP.
The aggregator would act as a conduit between FIUs and FIPs and does not process the data, according to the Sahmati, a collective of the AA system. It is also data-blind which means that information flowing through it is encrypted, and can be processed only by FUI for whom the data is intended. Also, AA cannot leak or misuse user data, as it cannot store them.