On Thursday, the Reserve Bank of India rolled out a system called Account Aggregators, with eight major banks on board. This system aims to create a shared repository of financial data of their customers. If done right, the program promises better delivery of credit, while integrating underserved sections of the population.

Account Aggregators are a set of non-banking financial companies that will act as intermediaries between financial information users (FIU) and financial information providers (FIP). So far State Bank of India, ICICI Bank, Axis Bank, IDFC First Bank, Kotak Mahindra Bank, HDFC Bank, IndusInd Bank, and Federal Bank have joined the system. More are expected to be onboarded as the system takes off.

At present, credit bureaus have data on only 1.4 billion people, leaving a significant part of the population without access to capital. Users who consent will be able to instantly share their data, without having to submit it over and over to different institutions.

For MSMEs, credit availability remains one of the biggest hurdles. An ecosystem like the one outlined by the RBI could speed up and streamline processes. However, the success of this program depends heavily on the number of entities that join it. A big challenge would be to enroll those banks and lending institutions that are yet to undergo complete digitisation. Unless their infrastructure can be brought on par, the conceptualised ecosystem will remain a theory.

That said, the design holds promise. Infosys chairman Nandan Nilekani, who was an advisor in this endeavour, also spoke of its potential to be used in other sectors such as healthcare, where hospitals and testing labs could work with a similar pool of data. He also revealed plans of including telecom operators in Account Aggregators. While he did not share their exact role, including data held by the telecom industry would make the repository very powerful, and open channels to provide better service in multiple areas.