GSTN to Integrate with Account Aggregator System before July 1, 2023: Know all about Account Aggregator Network

The integration between the Goods and Services Tax Network (GSTN) and the Account Aggregator (AA) system, a platform for sharing financial data, is scheduled to be completed before July 1, 2023.

In 2021, the Government of India introduced the Account Aggregator System as a groundbreaking digital innovation that has the potential to transform investment and credit practices. This system is expected to streamline and simplify various complex procedures involved in accessing credit for small businesses.

As per the sources, this development marks the initial phase in introducing open banking in India, enabling countless customers to securely and conveniently access and share their financial information across various institutions through digital means.

Account Aggregator

An Account Aggregator (AA) is an entity regulated by the Reserve Bank of India (RBI), holding an NBFC-AA license, that facilitates the secure and digital access and sharing of information between a person and their financial institution. Within the AA network, the individual can securely transfer data from one financial institution to another, but only with their explicit consent.

Account Aggregator replaces the conventional practice of accepting lengthy terms and conditions akin to a "blank cheque" with a more detailed and controlled approach. It enables individuals to provide explicit and step-by-step permissions for each specific use of their data, ensuring greater transparency and control over their information.

Who Includes the Account Aggregators

The individual's bank simply needs to become part of the Account Aggregator network. Currently, eight banks have already joined this network, with four of them (Axis, ICICI, HDFC, and IndusInd Banks) already sharing data based on individual consent. The remaining four banks (State Bank of India, Kotak Mahindra Bank, IDFC First Bank, and Federal Bank) are expected to join and start sharing data in the near future.

Kinds of data can be shared

Currently, banking transaction data, such as bank statements from current or savings accounts, can be shared among the banks that are actively participating in the network.

In the future, the Account Aggregator framework aims to enable the sharing of various financial data, including tax information, pension details, securities data (such as mutual funds and brokerage accounts), and insurance-related data, among others. Furthermore, the scope of the Account Aggregator system is expected to expand beyond the financial sector, allowing individuals to access healthcare and telecom data as well.

Can Account Aggregator can share data

No, Account Aggregators do not have the ability to view or access individual data directly. Their role is limited to securely transferring data from one financial institution to another as per the individual's explicit direction and consent.

Despite the name, Account Aggregators do not actually aggregate or combine your data. Unlike technology companies that collect and analyze data to create detailed profiles, Account Aggregators solely facilitate the transfer of data while maintaining privacy and confidentiality.

Is it possible for a consumer to choose not to share their data?

Yes, registration in an Account Aggregator (AA) is completely voluntary for consumers. If the bank the consumer uses is part of the network, they have the option to register with an AA. They can then choose which accounts they want to link and selectively share their data from a specific account with a new lender or financial institution when providing their consent through the Account Aggregator.

At any point, a customer has the right to reject a consent request for data sharing. If a consumer has previously agreed to share data on a recurring basis (e.g., during a loan period), they can still revoke this consent at any time.

How can you register with Account Aggregator

To register with an Account Aggregator (AA), individuals can utilize the AA's dedicated mobile app or website.

Upon registration, the AA will assign a unique handle, similar to a username, which can be utilized during the consent process. Currently, there are four operational AA apps available for download, namely PhonePe, Yodlee, Finvu, OneMoney, CAMS Finserv, Perfios and NADL, each holding operational licenses as AAs.

New services can a customer access if their bank has joined the AA network of data sharing

The integration of Account Aggregator (AA) services brings significant improvements in two key areas for individuals: access to loans and money management. Currently, when a customer seeks a small business or personal loan, there is a cumbersome process of sharing various documents with the lender. However, with the AA system in place, this process becomes more streamlined and efficient.

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