Nandan Nilekani, the man behind Sahamati
Nandan Nilekani, designer of Aadhaar has now come up with a new platform called Sahamati. Sahamati is an account aggregator (AA) that allows users to share their financial data digitally with third parties in secure manner. The app is basically designed to provide an aid to all the individuals and small businesses for sharing their digital financial data with third parties in a safe and secure manner.
iSpirt developed the technology framework which is a non-profit organisation. With the help of AA app, users looking for financial planning services will be able to share their mutual fund, insurance, provident funds, and banking details digitally.
The use of account aggregators could lead to cost of efficiency, which can be shared with the customers in terms of lower rate of interest.
Reserve bank of India, Insurance Regulatory and development Agency, Securities and Exchange board of India, and Provident Fund Regulatory and Development Agency came together to work around account aggregators which began around four years ago to allow related entities under their control to share data with user consent “Lending to SMEs and for personal finance will become very easy through AAs,” said SBI Chairman Rajnish Kumar.
Further, he said that it can definitely scale up, “Already on the website prsbloansin59.com, we are using GSTN, IT and bank account statements with user consent and give in –principle approval in 59 minutes.”
“If Indians can leverage their footprints to get better loans and other financial products, we will have taken a step towards true data empowerment. Thanks to AA and other digital infrastructure that we built, India will become a leader in empowering individuals and small businesses with their own data,” said Nandan Nilekani, former Chairman, UIDAI.
AAs functions to transfer the data, not to store it
In 2016, RBI approved a new class of NBFCs to act as account aggregators. The main responsibilities of the account aggregator are to provide services based on the direct consent of the individual clients. The basic function of the AAs is to transfer the client’s data but not to store it. And to ensure the client’s data safety issues, the AAs will not be able to read the data nor will it be allowed to resell it.
Sahamati has formed under Section 8 non-profit to support the ecosystem. It will be headed by former journalist BG Mahesh with all other members from account aggregator organisations, mutual funds, banks, financial information users, including firms into flow-based credit, personal finance, and wealth management.
Soon, Sahamati will be a self-regulatory organisation
The basic work of Sahamati is to increase the adoption of the framework by creating awareness among potential FIPs, AAs, and FIUs on the latest technology and institutional architecture and also to support implementation and integration through various workshops.
It will also apply for the Self- regulatory organisation license with the RBI, which will give it a self-governing body status, allowing it to work on a code of conduct and best practices for member organisation.