Nodal Account

Running an online aggregator model? Confused if you should open a Nodal account? We’ll help you understand the needs & relevance of a Nodal account in your business.

Why is a Nodal Account relevant?

With the new age of digital platforms and aggregators revolutionising the market, the RBI has proposed nodal accounts for online intermediaries. The purpose of a nodal account is to hold funds on behalf of the customers and vendors. It safeguards the interests of customers and vendors so that payments are collected, processed and payouts, are done to relevant vendors without undue delay. Your business would be an intermediary if you meet any one of the following criterias:

  • You are collecting money on behalf of vendors from your customers
  • You are sourcing the products/services and are not the manufacturer or creator of the same
  • You do not fully pay for the products or services

Below are some of the real-world use cases and how nodal accounts are advantageous for them:

E-commerce & Marketplaces:

  • Easily set up sellors/vendors and set up commissions and settlements
  • Instant refunds through various bank settlements
  • Easily reconcile payments and automate payouts
  • Offer cashback and offers to customers through direct settlements

Lending & Financing

  • Easily disburse loans to customers
  • For lending aggregators, easily manage funds of various lendors and customers with direct disbursals and recollections
  • Easily send refunds
  • Maker & Checker for lending partners & aggregators to ensure compliance


  • Instant disbursals of claim amounts
  • Track every transaction and claim payouts through APIs
  • Settle commision payouts for every insurance vendors & partners
  • For aggregators, instantly settle with Insurance providers and settle commissions on payouts.

What is a Nodal Account?

Nodal Account is a type of current account that is used to hold the funds on behalf of customer & vendors (payouts) to safeguard the interests of the two parties. A nodal account ensures that the money does not legally belong to the intermediary at any point of time. Nodal Accounts were introduced by the RBI as a mandate for intermediaries such as aggregators, e-commerce platforms & payment gateways.

The guidelines posted by the RBI regarding the same as posted below:

How a nodal account works?

During the operation and onboarding, the problems most people face while working with most banks:

  • Complicated On-boarding and minimum business requirements
  • Multiple modes of collection of payments through external partners into the Nodal Account
  • Defining commissions for multiple vendors, intermediaries and aggregator
  • Manual adjustments for payouts for transactions level requests such as discounts, cashback, additional charges, fees, etc.
  • Unable to handle instant disbursals to vendors, with defined commissions to create smoother settlements.
  • Complicated reconciliations for the entire flow of funds

Through Paytm Payments Bank’s Nodal Account offering with powerful APIs, easier on-boarding and dedicated Key account manager, the entire process becomes easy. We provide a powerful, easy & robust system to help you focus on your business.

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