Reserve Bank of India (RBI) Governor Shaktikanta Das announced launching a pilot unified lending interface (ULI) project at a conference in Bengaluru this week. “Based on our experience from the pilot project, a nationwide launch of the ULI will be done in due course,” he said at the DPI global conclave on Monday. During the Monetary Policy Committee (MPC) meeting in August last year, RBI announced the development of a credit delivery platform to meet the demand in underserved areas. RBI’s Reserve Bank Innovation Hub (RBIH) was tasked with developing the “Public Tech Platform for Frictionless Credit Delivery”, or ULI.

Das said, “Just like UPI transformed the payments ecosystem, we expect ULI will play a similar role in transforming the lending space in India.” The purpose is to provide a single platform where borrowers and lenders can connect.

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What Is ULI And How Will It Benefit You?

According to Das, the platform will offer a “seamless flow of digital information, including land records of various states from multiple data service providers to lenders”. The platform will reduce the processing time for documentation, credit appraisal, disbursal, etc., primarily benefitting small borrowers in rural areas, where getting a loan is relatively more difficult.

Benefits For Lenders:

ULI has a plug-and-play approach, so one does not need to install any additional software. It is an easy-to-use platform that will provide lenders with information about borrowers from diverse sources in one place. Access to relevant information on a single platform will make the loan appraisal and disbursal process faster and easier.

Benefits For Borrowers:

The borrowers’ information will not be on the platform without their knowledge. Das said, “The system is consent-based, that is based on the consent of the potential borrowers; so the requirement of data privacy is fully protected.” Besides, it will reduce the turn-around time as borrowers do not need to provide the documents already available in the system.

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RBI’s Lending Focus:

The banking and financial ecosystem is fast being digitalised. Das said, “Over the last decade, the traditional banking system has undergone an unprecedented technological transformation.”

According to RBI’s annual report, the central bank and the government have prioritised increased lending to the micro, small, and medium enterprises (MSME) sector. It has shown results as the outstanding credit growth rose by 20.9 per cent year-on-year (YoY), from Rs 21.5

lakh crore in December-end 2022 to Rs 26.0 lakh crore in December-end 2023. The platform will further support lending growth to small and rural borrowers and MSMEs, among others.