Reserve Bank of India to Launch Lending Platform

The Reserve Bank of India (RBI) plans to launch a technology platform designed to enable frictionless credit, especially for small- to medium-sized businesses (SMBs).

The RBI began piloting the platform — which it plans to name the “Unified Lending Interface (ULI)” — in 2023 and plans to launch it nationwide “in due course,” said RBI Governor Shaktikanta Das, per a Monday (Aug. 26) press release.

“This platform facilitates seamless and consent-based flow of digital information, including even land records of various states, from multiple data service providers to lenders,” Das said in an inaugural address at the RBI@90 Global Conference, per the release. “This cuts down the time taken for credit appraisal, especially for smaller and rural borrowers.”

Das added that the ULI architecture has common and standardized APIs, is designed for a “plug-and-play” approach to provide access to information from diverse sources, and enables borrowers to get credit quicker and without providing extensive documentation, per the release.

“In sum, by digitizing access to customer’s financial and non-financial data that otherwise resided in disparate silos, ULI is expected to cater to large unmet demand for credit across various sectors, particularly for agricultural and [SMB] borrowers,” Das said, according to the release.

The RBI launched its pilot project for this platform in August 2023, calling it at the time a “Public Tech Platform for Frictionless Credit.”

When announcing the launch of the pilot, the RBI said it aims to connect separate systems that hinder the timely delivery of rules-based lending.

“With rapid progress in digitalization, India has embraced the concept of digital public infrastructure which encourages banks, [non-banking financial companies (NBFCs)], FinTech companies and startups to create and provide innovative solutions in payments, credit and other financial activities,” the RBI said in August 2023.

India’s merchants and consumers are leaders in mobile payments innovation, according to the PYMNTS Intelligence report “2023 Global Digital Shopping Index.”

The report found that 79% of consumers in India paid for their last retail purchase using a digital wallet with the Unified Payments Interface (UPI) as the underlying payment method.