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Policy Update: Inclusion of Goods and Service Tax Network (GSTN) as a Financial Information Provider under Account Aggregator Framework
Policy Update: Inclusion of Goods and Service Tax Network (GSTN) as a Financial Information Provider under Account Aggregator Framework

November 24, 2022

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The Reserve Bank of India (RBI) has included Goods and Services Tax Network (GSTN) as a Financial information Provider (FIP) under the Account Aggregator (AA) framework. This inclusion has been made to facilitate cash-flow based lending to MSMEs. The RBI has noted that the Department of Revenue shall be the regulator of GSTN for this specific purpose. The financial information for this purpose shall be the GST Returns, viz. Form GSTR-1 and Form GSTR-3B.

Account Aggregator Framework

The AA framework is based on the Data Empowerment and Protection Architecture (DEPA) which allows users to share their data through an independent consent management entity. The AA framework aims at making financial data more usable and accessible by allowing licensed participants to facilitate customers’ financial data transfer between the providers and users of such information.

As of the date of writing, the RBI has provided AA operating license to CAMS FinServ, Cookiejar Technologies, FinSec AA Solutions Private, and National e-Governance Services Asset Data. In addition to these, PhonePe, Perfios, and Yodlee, have received in-principle approval from the RBI. So far, banks like Axis Bank, IDFC, IndusInd, SBI, HDFC, ICICI, and Federal Bank have joined the framework.

Regulating entities and regulatory framework

 The framework is governed by the Reserve Bank of India’s (RBI) Master Direction – Non-Banking Financial Company (NBFCs) – Account Aggregator (Reserve Bank) Directions, 2016. The four financial regulators- RBI, Securities and Exchange Board of India (SEBI), Pension Fund Regulatory and Development Authority of India (PFRDA), Insurance Regulatory and Development Authority of India (IRDAI) allow their respective regulated entities (REs) to share data through AAs after obtaining user consent.

How does an AA work?

The AAs are data-blind consent custodians or the financial data access fiduciary which facilitate consent-based sharing of financial information in real-time between the Financial Information Providers (FIPs) and the Financial Information Users (FIUs). In simpler terms, these AAs act as intermediaries which transfer data from one financial entity such as banks, NBFCs etc. and transfer it to another financial entity without peeping into the financial data. This, however, is dependent on consent of the consumer.

The FIPs are data fiduciaries like banks, NBFCs, pension fund repository etc., and they hold customer data. The FIUs are the users of such financial information and include NBFCs, personal finance management, wealth management etc.

Objective of AA framework

The objective of AAs is to assist data sharing in a safe and secure manner, and to provide greater autonomy to users over their data. Through this, the AA framework will be able to better collate financial data spread across various financial entities and share it with financial entities using this data or the FIUs.

What information can be shared through AA framework?

The master direction on AA by the RBI specifies that only “financial assets” data transfer can be facilitated by the AAs. There are 19 categories of financial assets as defined by the master direction which includes deposits with banks and NBFCs, Systematic Investment Plans (SIPs), government securities etc.

For more information, write to policy@nasscom.in.


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Apurva Singh
Senior Policy Associate

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