On Friday, The Reserve Bank of India (RBI) went all out to make ample liquidity for the onset of the financial crisis. It is available in the market and nudges banks to lend to the productive sectors of the economy, announcing measures to inject ₹3.74 trillion.
RBI reduces the cash reserve ratio for all banks by 100 basis points to 3.0%
RBI infuses this boost with a target term of up to 3 years.
The liquidity boosts
India’s central bank has announced liquidity-boosting measures to help stabilise financial markets during the COVID – 19 crises. Since India is in stage 3 the commerce sector has hit hard and calls for short-term aid. The markets which have fallen sharply due to the coronavirus outbreak, a source said on Thursday can be revived.
The Indian stock market plunged into bear territory on Thursday, with the blue-chip Nifty 50 sliding to its lowest in over 2-1/2 years, after the coronavirus outbreak was termed a pandemic and the United States suspended travel from Europe.
As the government looks to provide more support to India’s fintech industry, private players such as banks and fintech startups are now adopting Reserve Bank of India’s (RBI) account aggregator (AA) framework, which seeks to bring disparate financial customer data onto a single platform.
As of now, banks such as Axis Bank, Bajaj Finserv, ICICI Bank, IDFC FIRST Bank, HDFC Bank, Indusind Bank, Kotak Mahindra Bank, and State Bank of India (SBI) and fintech startups are exploring use-cases of AA.
The AA framework makes data sharing easier across services, but only after gaining consent from users.
According to RBI, the AA framework will help financial services companies to easily get transactional and banking data of users to optimise product offerings for their customers.
Once users grant consent to account aggregator, financial service providers such as banks, mutual fund providers, insurance providers, and tax filing platforms can request for this data through open application programming interfaces (APIs).
The data can be further requested by fintech platforms such as lending, wealth management, personal finance management, and robo-advisory startups to better serve their customers.
Notably, account aggregator platforms can’s store the data but can only share it with other financial service providers.