The next success story in India's fintech space will likely be scripted by startups leveraging account aggregator framework, according to Ritesh Banglani, cofounder and managing partner at Stellaris Venture Partners
Speaking at Inc42’s MoneyX 2024 event, Banglani said he is bullish on fintech startups tapping account aggregator framework to build new products and business models
“Most VCs are currently investing in regulated fintech entities or entities operating in sectors where the path to regulation is clear,” he said
In India’s fintech space, the next success story will likely be scripted by startups leveraging account aggregator framework, according to Ritesh Banglani, cofounder and managing partner at Stellaris Venture Partners.
Speaking at Inc42’s MoneyX 2024 event, Banglani said he is bullish on fintech startups tapping account aggregator framework to build new products and business models, as India’s digital payments industry continues to thrive, driven by initiatives like Unified Payments Service (UPI).
“Most VCs are currently investing in regulated fintech entities or entities operating in sectors where the path to regulation is clear,” he added.
It is pertinent to note that the Reserve Bank of India (RBI) launched the account aggregator framework in 2019 to ease flow of credit into micro, small and medium enterprises (MSMEs) and allow individuals to share their personal financial information with financial institutions seamlessly and digitally.
As per a report, the total number of successful consents on the AA framework crossed 100 Mn as of August 15, 2024. It also said that 80-90 Mn people are using AA, which translates to 8% of the adult population of India.
In her Budget 2024-25 speech, Finance Minister Nirmala Sitharaman also proposed large-scale DPI applications for the credit sector, along with ecommerce, education, logistics, among others.
This comes on the heart of RBI Governor Shaktikanta Das’ remarks that initiatives like the AA framework, Unified Lending Interface (ULI), Open Credit Enablement Network (OCEN) would help redefine credit access, particularly for small businesses and individuals.
In an effort to further give impetus to India’s digital infrastructure, RBI is also planning to launch ‘Unified Lending Interface’ to offer credit to rural and small businesses. The platform will cater to large unmet demand for credit across various sectors, particularly for agricultural and MSME borrowers.
Addressing the RBI@90 global conference on “Digital Public Infrastructure and Emerging Technologies” last month, the central bank chief said that the RBI piloted the ULI infrastructure last year and a pan-India launch will happen in “due course”.
“Just like Unified Payments Interface (UPI) transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India,” the RBI governor said then.
