How AA framework is changing your financial life for the better

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₹ 2 lakh–4 lakh annually; hence the AA-generated bank statements have significantly helped to bridge this gap," he says. "The AA framework is a consent-based data-sharing mechanism that offers consumers a convenient and secure solution to access and use their data across banking, investments, insurance, pension, and tax.

This “informational collateral" will equip the unserved and underserved consumers to access appropriate financial products and services on better terms," says BG Mahesh, co-founder of DigiSahamati Foundation. Industry experts say over time, more loans would get disbursed on the basis of cash flows, especially for new-to-credit borrowers that are yet to build a credit track-record or a credit score.

“At some point, everyone has to start without a credit scrore. With the AA framework, the banks can start lending to such customers at least in a small way, in the form of a secured credit card, consumer durable loan, affordable housing, etc.," says Shetty of Bank Bazaar.

For now, there are few gaps in the system as the AA infrastructure is still in the implementation phase. For example, not all banks have fully integrated with the AA ecosystem yet; the same goes for insurers and other regulated financial intermediaries.

There are still gaps in data on the investment side, with some fintechs raising concerns due to lack of purchase price data on investments. However, as things get ironed out, the AA framework can widen the reach and the depth of the penetration of financial products in India.