Open Banking in India

India's Account Aggregator (AA) framework is a distinctive approach to open finance that introduces a dedicated intermediary layer for consent-based data sharing. Established by the Reserve Bank of India (RBI) through its 2016 Master Direction, the framework creates a new category of Non-Banking Financial Company (NBFC-AA) that acts as a consent manager between Financial Information Providers (FIPs, such as banks) and Financial Information Users (FIUs, such as lenders or wealth managers).

The AA framework is architecturally innovative. Account Aggregators do not store or process financial data. Instead, they manage consent artifacts and facilitate encrypted data flows directly between FIPs and FIUs. This design preserves privacy while enabling interoperability across a fragmented financial system. The consent model gives individuals granular control over what data is shared, with whom, for what purpose, and for how long.

The framework is part of India's broader "India Stack," which includes Aadhaar (identity), UPI (payments), and DigiLocker (documents). Together, these digital public goods create a powerful infrastructure for financial inclusion. The AA framework went live at scale in 2021 when eight major banks joined, and adoption has been rapid, surpassing 60 million linked accounts by 2023.

The scope of data covered is broader than most international counterparts. In addition to bank account data, the AA framework covers mutual funds, insurance policies, pension accounts, and even GST (tax) data. SEBI's extension of the framework to include securities data marked a significant milestone in making it a true open finance system. Lending has emerged as the dominant use case, with lenders using AA data to underwrite loans for small businesses and individuals who may lack traditional credit histories.

Sahamati, the industry alliance for the AA ecosystem, provides coordination, certification, and dispute resolution services. The framework's emphasis on consent management and data minimization has influenced discussions on data governance in other jurisdictions.