Imagine you have 10 Lakhs savings on your Axis Bank account. However, you opened an HDFC Bank account with just a 15k balance. HDFC does not know how much wealth you have accumulated on the Axis Bank account.
Now, you need a loan of a certain amount, and you find that HDFC has better rates than Axis. Usually, loans are disbursed based on your credit profile. However, HDFC Bank is not approving your loans of such high amounts because you have a low credit score (or no score at all as you haven’t taken any loans or credit cards earlier).
What can be done now?
The Account Aggregator Framework is a revolutionary system introduced by RBI that will allow a person to incorporate all his financial information (that is, savings and current account data) under one roof.
That means, now all banks participating in the Account Aggregator Framework will share the financial information within the framework, and they can also access the information shared by other financial institutions on request.
This framework can be managed with Account Aggregator Apps, and the requests (duration of access, and historical data) can be managed by the user (that is, you) within the app itself. Just like UPI requests, these will be protected by the OTP system.
Date of Incorporation: 2nd September 2021.
- Axis Bank
- HDFC Bank
- Federal Bank
- ICICI Bank
- IndusInd Bank
- Kotak Mahindra Bank
- State Bank of India
Just like UPI (or Unified Payments Interface) uses a VPA (Virtual Payment Address) which is universally recognized across different UPI payment apps, Account Aggregator Framework uses a VUA (Virtual User Address) which will be universally recognized across different Account Aggregator Framework Apps.
Here’s a video from TechnoFino that explains it beautifully:
In case you want to read more about it in detail, and also set up your Account Aggregation on your Android Device with RBI approved Account Aggregator apps, then refer to this post:
This post describes the following:
- What is Account Aggregator Framework?
- Benefits of Account Aggregator Framework.
- Account Aggregator Framework FAQ
- How to set up your Account Aggregator Framework Account on Android?
You should also follow this thread on FinTalks Facebook Group.