RBI Governor Shaktikanta Das Announces Nationwide Launch of Unified Lending Interface (ULI)
On Monday, Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the technology platform for providing ‘frictionless credit,’ initially launched as a pilot project, will soon be introduced nationwide. This platform will be named Unified Lending Interface (ULI).
Transforming the Lending Space
Speaking at the Global Conference on Digital Public Infrastructure and Emerging Technologies in Bengaluru, Das explained that ULI is expected to revolutionize the lending space in India, much like the Unified Payments Interface (UPI) transformed the payments ecosystem. He referred to the ‘new trinity’ of JAM-UPI-ULI as a significant step forward in India’s digital infrastructure journey.
How ULI Works
The ULI platform facilitates a seamless and consent-based flow of digital information, including land records from various states, from multiple data service providers to lenders. This reduces the time taken for credit appraisal, especially for small and rural borrowers. The platform uses common and standardized APIs designed for a ‘plug and play’ approach, ensuring digital access to information from diverse sources.
Das highlighted that this reduces the complexity of multiple technical integrations, enabling borrowers to benefit from quicker credit delivery and reduced documentation requirements. By digitizing access to customers’ financial and non-financial data, ULI aims to meet the large unmet demand for credit across various sectors, particularly for agricultural and MSME borrowers.
Future of Digital Payments
Das also spoke about the success of the Unified Payment Interface (UPI), noting that the current digital payments ecosystem in India offers simple, safe, and secure options for instant fund transfers. He emphasized that the RBI is continually working on policies and systems to strengthen the financial sector, making it more customer-centric.
Doubts Revealed
RBI -: RBI stands for Reserve Bank of India. It is the central bank of India, which means it controls the money supply and interest rates in the country.
Governor -: A Governor in this context is the head of the Reserve Bank of India. He is responsible for making important decisions about the country’s money and banking system.
Shaktikanta Das -: Shaktikanta Das is the current Governor of the Reserve Bank of India. He is the person who announced the new lending platform.
Unified Lending Interface (ULI) -: Unified Lending Interface, or ULI, is a new technology platform that makes it easier for people to get loans. It helps share information quickly and safely between borrowers and lenders.
Frictionless credit -: Frictionless credit means getting a loan without many difficulties or delays. It makes the process smooth and fast.
Pilot project -: A pilot project is a small-scale test run of a new idea or technology. It helps to see if the idea works well before using it everywhere.
Nationwide -: Nationwide means all across the country. In this case, it means the new lending platform will be available everywhere in India.
Credit appraisal -: Credit appraisal is the process of checking if someone is eligible for a loan. It involves looking at their financial history and ability to repay the loan.
Documentation -: Documentation refers to the papers and records needed to apply for a loan. Simplifying documentation means making this process easier and requiring fewer papers.
