The Reserve Bank of India (RBI) intends to launch a technology platform that aims to enable frictionless lending.
Last year, the financial regulator of the mentioned South Asian country began piloting the platform, which is expected to be called the Unified Lending Interface (ULI). The central bank of India plans to roll out the mentioned functionality system nationwide in due course. The announcement about this by RBI Governor Shaktikanta Das was contained in a press release issued on Monday, August 26.
Shaktikanta Das said in an inaugural address at the RBI@90 Global Conference that the new platform enables a seamless and consent-based flow of digital information, including land records across various states, from multiple data service providers to lenders. He also noted that ULI cuts down the time it takes to assess creditworthiness, especially for smaller and rural borrowers.
Moreover, Shaktikanta Das said that the ULI architecture has common and standardized APIs, and is designed for a plug-and-play approach to provide access to information from diverse sources. Also, in this case, borrowers can get loans faster and without providing extensive documentation.
Shaktikanta Das said that by accessing financial and non-financial data of customers, which would otherwise be stored in disparate silos, ULI is expected to address the large unmet demand for credit across various sectors, especially for those borrowers who are from the agriculture and small and medium-sized business sectors.
RBI launched a pilot project to develop the new platform in August 2023. At that time, the mentioned project was described as a public technology platform for frictionless credit. Also, while launching this project, the financial regulator of the South Asian country stated the goal of connecting separate systems that hinder the timely delivery of rules-based lending.
In August 2023, RBI also said that as a result of progress in the area of digitalization India has embraced the concept of digital public infrastructure which encourages banks, non-banking financial companies fintech firms, and startups to create and provide innovative solutions in payments, credit, and other financial activities.
As we have reported earlier, RBI Joins Project Nexus for Seamless Cross-Border Payments.
