After UPI success, RBI looking at nationwide launch of Unified Lending Interface

After the success of UPI in the digital payments space, RBI is now looking at a nationwide launch of a technology platform to enable frictionless credit across various sectors, particularly for agriculture and MSME borrowers. The platform will facilitate consent-based flow of digital information, including land records of various states, from multiple data service providers to lenders.

Based on RBI’s experience with the pilot of the aforementioned technology platform (Public Tech Platform for Frictionless Credit/PTPFC), which was launched last year, its nation-wide launch will be done in due course, Governor Shaktikanta Das said. From now on, the central bank plans to call the platform “Unified Lending Interface (ULI)”.

“Just like UPI (Unified Payments Interface) transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India. The ‘new trinity’ of JAM (Jan Dhan, Aadhar, Mobile)-UPI-ULI will be a revolutionary step forward in India’s digital infrastructure journey,” Das said at the RBI@90 Global Conference on Digital Public Infrastructure and Emerging Technologies.

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“This cuts down the time taken for credit appraisal, especially for smaller and rural borrowers. The ULI architecture has common and standardised APIs (application programming interfaces), designed for a ‘plug and play’ approach to ensure digital access to information from diverse sources. This reduces the complexity of multiple technical integrations. It enables borrowers to get the benefit of seamless delivery of credit, quicker turnaround time without requiring extensive documentation,” he said.

Das emphasised that by digitising 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 MSME borrowers.

Ajay Rajan, Country Head - Government, Multinational & International Business, Transaction Banking & Knowledge Units at Yes Bank, said, “ ULI is set to revolutionize India’s financial landscape. By providing consensual access to financial data, ULI streamlines credit assessments for lenders. When combined with JAM and UPI, it forms a powerful digital trinity. This trio will transform India’s financial ecosystem, enhancing financial inclusion and enabling data-driven lending. Together, they’ll accelerate our nation’s progress towards a fully digital economy, making financial services more accessible and efficient for all Indians.”

• Also read: Nationwide launch of Unified Lending Platform in due course: RBI Governor

The PTPFC, developed by the Reserve Bank Innovation Hub (RBIH), seeks to step up digital financial inclusion in India. It leverages open APIs and standards to streamline availability of data in a ‘plug and play’ model to enable disbursal of credit in a frictionless manner.

The reduced cost of operations for lenders due to the ease of availability of data may help them offer credit at affordable rates, per RBI’s Report on Currency and Finance.

The PTPFC pilot, launched in 2023, focused on products such as fully digital Kisan Credit Card (KCC) loans up to ₹1.6 lakh per borrower, dairy loans, MSME loans, personal loans, vehicle loans, tractor loans, digital gold loans, and home loans through participating banks.

Given the end-to-end digital processing, PTPFC has demonstrably reduced the turnaround time of KCC loans from a few weeks to less than an hour, the Report said.