On Tuesday, Ahmedabad-based software development company, Cygnet Infotech Pvt Ltd, announced that it has gained preliminary authorization from India’s central bank and regulatory body, the Reserve Bank of India (RBI), to function as an account aggregator for Non-banking Financial Companies or NBFCs.
According to a statement by the IT solutions company, one of the most significant open financial data-sharing protocols subject to the Reserve Bank of India’s regulation is Account Aggregator. It enables users to securely and digitally communicate their financial data with various financial institutions quickly. It makes it easier for financial institutions to swiftly and with convenient access to the financial data of clients with their approval.
Niraj Hutheesing, the Founder and Managing Director (MD) of Cygnet Infotech Pvt Ltd, said that the company would be able to participate in the financial industry’s revolutionary transformations thanks to the NBFC Account Aggregator License or NBFC-AA License that it has received. The payment ecosystem has already been transformed by the instant real-time payment system, Unified Payments Interface or UPI so the Account Aggregator will have an almost identical impact on financial inclusion and digital lending.
The Managing Director (MD) further stated that much better credit options would be available to Small and Medium-sized Enterprises or SMEs. At the same time, banking and financial institutions will have the chance to diversify their loan portfolios. As Financial Information Providers or FIP, the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA) have already integrated with the ecosystem of account aggregators at various stages. With banking and financial institutions, Goods and Service Tax Network’s (GSTN) inclusion as a Financial Information Provider will be crucial in enabling the flow-based loan facility to reach the unattended Small and Medium-sized Enterprise sector.