Seamless credit network

Interoperability can enable inclusive lending

The Reserve Bank of India’s (RBI’s) decision to introduce interoperability among account aggregators (AAs) by December 31 seeks to simplify financial-data sharing, which could help reduce loan-application dropoffs. The need for this is underlined by the rapid growth of the AA ecosystem. According to the CRIF Credit Information Services and industry alliance Sahamati, the AA framework facilitated an estimated ₹3.82 trillion in loan disbursements across 36.8 million accounts in 2025-26, accounting for 8.4 per cent of retail lending and loans to micro, small and medium enterprises by value and 11.8 per cent by volume. By September, the ecosystem had fulfilled 595 million consents. More importantly, it is reaching borrowers often overlooked by conventional lending models. In the year ended June 2026, borrowers new to credit accounted for 28.5 per cent of business loans worth ₹10 lakh-25 lakh issued by AA-enabled lenders, against 8.6 per cent for other lenders. In personal loans, their share was 9 per cent, compared with 3.8 per cent through conventional channels. In 2025-26, the value of AA-enabled lending was estimated to be about 1.1 per cent of India’s gross domestic product.

 

The framework addresses a longstanding problem in the Indian lending ecosystem. Individuals and small businesses without established credit histories often struggle to obtain formal loans even when they have regular incomes or viable businesses. Traditional assessments rely heavily on credit history and require borrowers to submit bank statements, tax documents, and other paperwork. The AA framework allows lenders to access financial information directly from participating institutions, with borrowers’ consent. This enables a more comprehensive assessment of repayment capacity. Its benefits extend beyond loan approvals. The study found that, in lending for two-wheelers, the share of loans overdue by more than 90 days was 0.5 per cent for AA-enabled originations, compared with 5.3 per cent for conventional loans. Greater access, therefore, need not come at the cost of weaker credit quality.

 

However, differences in technical standards, system reliability, and integration costs could undermine the benefits. Banks, non-banking financial companies, and AA platforms must adopt common protocols, ensure reliable data transfers, and minimise transaction failures. Transparent pricing and clear accountability for failed consent requests or incomplete data sharing will also be necessary. Data protection is equally important. Financial information can reveal sensitive details about an individual’s income, spending and liabilities. Strong encryption, access controls, independent security audits, and effective grievance redress are essential to maintain public trust. It is also important to ensure that smaller lenders are not disadvantaged by high integration costs. Research by the RBI-promoted Centre for Advanced Financial Research and Learning has associated greater exposure to the AA rollout with higher local economic activity. While this does not establish that AAs alone caused the increase, it points to their wider potential. Interoperability can help realise that potential provided efficiency is matched by safeguards. Better data sharing should make credit easier to access without compromising borrowers’ privacy or financial security. With 17 AAs operating in the ecosystem, better connectivity with banks, insurers and pension-related institutions could enable consent-based sharing of a broader range of financial information for inclusion.