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Banks as ONDC buyer network participants

ONDC is a government-backed initiative that aims to democratise digital commerce. You can read more about it here.

A buyer network participant is any app or platform that aims to connect a set of buyers with a set of products that the buyers may want to purchase.

In our case, the buyer network participant is a bank’s mobile banking app.

Which financial products can be sold on ONDC?

In lending, ONDC is starting with enabling:

-        Personal loans for individuals

-        GST-based loans are available to individuals and sole proprietors.

The API draft specifications were released in August last year for early feedback.

In insurance, ONDC is starting with enabling three offerings:

-        Health insurance

-        Marine insurance

-        Motor insurance

In investments, ONDC will begin with mutual funds.

Why should banks connect the above providers with buyers?

Bancassurance counts as a critical channel when it comes to an insurance provider’s revenue growth.

Mutual Funds, too, depend on banks as a key distribution channel.

While insurance providers and mutual funds derive income from banks, banks, too, earn a significant chunk of money as commissions for all the insurance policies and MF schemes they cross-sell.

For users, it will add to the variety of insurance and MF scheme options they can choose from.

Hence, enabling mutual funds and insurance providers to list on their banking apps via ONDC infrastructure easily is a win-win for all parties involved!

Now, while the case for cross-selling being easier via ONDC is easy to comprehend, one may ask, why loans?

Each bank has its risk appetite, which drives how it manages its loan book.

A bank that prefers lending to retail individuals can provide GST-based loans via ONDC for its business customers. More business—or wholesale-oriented banks can provide personal loans via ONDC.

Therefore, lending has become a beautiful use case for banks participating in ONDC as buyer network participants!

ONDC can transform the way banks choose to cross-sell financial products. If you are a bank exploring participating in ONDC as a buyer network participant or looking to sell insurance, loans and mutual funds via ONDC evaluating the ONDC opportunity – reach out to us today at

*The writer is a banking professional who is currently a product manager at a leading bank.


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