Credit where it’s due: India’s Account Aggregator network will multiply our digital dividends

In 2009, such a change was unimaginable. Formal loans at scale were a quixotic moonshot—80% of adults didn’t even have a bank account, let alone access to credit. Yet, quietly, the Lego blocks of a solution were laid. First, via Aadhaar’s eKYC, identity verification became universally available digitally, and India opened half a billion new accounts. Then Aadhaar eSign was launched, allowing any loan agreement to be signed digitally via a mobile phone. 

By 2015, DigiLocker had been introduced; it became a single window for multiple KYC affirmations and underwriting of documents (Aadhaar, PAN, Udhyam and state-wise vehicle/land credentials). The slow-burn effect of these interventions on GDP growth wouldn’t catch eyeballs until years later. 

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In 2016, a new block was introduced. In December, the Prime Minister announced the facility to pay anyone with just a mobile phone and QR code, across any account, using any app. It worked. Seemingly overnight, Indians went from dealing in cash to transacting digitally via UPI. Within two years, we added Bharat Bill Payments (BBPS), formalizing payments across a staggering array of bills (utilities, telecom, fees and loans). Then 2020 saw the launch of UPI Autopay, a low-cost loan repayment mechanism.

A decade on, India was still far from enabling universally accessible formal loans. But a powerful change was silently at play. Bank statements started filling up with granular cash flow movements: a house-help’s salary, a kirana’s seasonal income or a farmer’s steady electricity bill payments. Indians could now prove what and when they were earning as employees or entrepreneurs. They could prove they were worth betting on. But this data was in silos: only banks had it and their risk appetite became one’s credit destiny.

Then, all at once, change became inevitable on 2 September 2022—Account Aggregator Foundation Day—with the ability to share your financial statements seamlessly with consent. The logic was simple: Every loan in the country—across ticket sizes, borrower types or categories—requires income verification. Across personal loans, MSME loans, auto loans, business loans and every other conceivable type of credit, a lender can only lend based on data indicating the borrower’s financial flows. The ability to do only one thing well at scale—move financial information instantly at low cost and directly from its source—makes India’s open finance Account Aggregator (AA) network an axiomatic piece of digital infrastructure for access to credit. 

Yet, AA is not a magic bullet. It is merely the last block that completes a bridge under construction for 15 years—one that allows Indians to cross from being un-lendable to creditworthy by using a combination of digital public infrastructure blocks. Indians can now comply with a lender’s KYC requirements via DigiLocker and Aadhaar, use an AA to share their granular financial history formalized via UPI and BBPS, set up UPI Autopay for repayments and ongoing AA loan monitoring, and eSign a loan contract—all of it by means of a mobile phone in a few minutes. 

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It wasn’t easy for this approach to be adopted across all four financial regulators—RBI, Sebi, IRDAI, and PFRDA. But a historic move coordinated by the Financial Stability and Development Council (FSDC), led by the finance minister, prevented fracturing of the AA network, ensuring that it drives not just credit but also offers a unified view of citizens’ finances, covering savings, investments, insurance and pensions. 

The commercial model took a year of negotiations, but it is finally ready. RBI has evaluated prospective AAs over the years to give out 16 high-provenance licences. 

To address banks’ challenges in working with all licensed players, the network facilitator Sahamati built a router and filed an ecosystem self-regulatory organisation (SRO) application; 700-plus regulated entities—banks, investors, AAs and insurers—are tightening the screws and building safeguards on data pipes for the world’s largest rollout of open finance.

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Change is coming. 

280 million data sharing transactions, growing at 213% annually, have already facilitated ₹16.7 billion of credit disbursal, mostly to small ticket and first-time borrowers. Beyond credit, AA has enabled over 20 million Indians to access superior financial management, investments and life insurance. If AA adoption continues, conservative models indicate India could double formal small business credit and turbocharge progress towards solving a historically intractable problem: inclusive access to affordable credit for a billion Indians. 

With India’s credit growth in flux and shifting geopolitical realities making domestic economic growth drivers essential, cross-functional digital infrastructure like AA is necessary. Just as with the now-household names that rode stormy seas to stay on the UPI boat, the financial institutions that make the most of the AA wave will be the ones we’ll remember for unlocking affordable credit in the decades to come.

These are the authors’ personal views.

are, respectively, chief economic advisor to the Government of India; and co-founder and chief strategy officer at the Centre for Digital Public Infrastructure, IIIT, Bengaluru.