The account aggregator platform, in a way, facilitates open banking by enabling customers of one member bank to avail services from any provider entity by making available their transaction history through consent. This enables them to avail loans from lenders who provide these based on proof of cashflows. On Monday, SBI chief Dinesh Khara had informed the finance minister in an industry interaction that information on cashflows would enable credit to small businesses to grow at the same rate as personal finance.
In her latest meeting with the heads of banks and finance companies, Sitharaman directed that the pilot for account aggregator model and cashflow-based lending may be replicated in different regions around the country, including in the northeastern region, on the lines of the initiative by two banks in Varanasi district.
She emphasized that digital banking was an opportunity for banks to find new ways to reduce the cost of intermediation and provide cost-effective services. The meeting was attended by the Union minister of state for finance Bhagwat Kishanrao Karad, department of financial services secretary Sanjay Malhotra, department of economic affairs secretary Ajay Seth, and chief economic adviser V Anantha Nageswaran. Sitharaman also took stock of the progress in lending to the MSMEs. She told banks that they should go out and lend as, with a record profit of Rs 1.2 lakh crore in FY21 and Rs 79,000 crore in H1FY22, they have sufficient capital.
In her interaction with the media later in the day, Sitharaman said that the government had stuck to its word on privatisation and had completed the sale of Air India and Neelachal Ispat and was going ahead with the initial public offering (IPO) of Life Insurance Corporation (LIC). She did not comment on the ongoing investigations into the erstwhile management of the National Stock Exchange (NSE) during the tenure of former MD Chitra Ramkrishna, stating that she had no view until she could get to the bottom of what is available. She said that the government would soon appoint a chairman at the Insurance Regulatory and Development Authority of India (Irdai) — a post that has been vacant for several months.
The FM refuted that the government was using the Enforcement Directorate against political rivals. She pointed out that even if the ED wanted to do a political investigation, it could not do so as the department deals with predicate offenses. “This means there is already an offense and there could be a PMLA (Prevention of Money Laundering Act) angle, which they are acting upon,” she said.
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