The Reserve Bank of India (RBI) is likely to launch a unified lending interface (ULI) digital platform shortly to facilitate smooth lending infrastructure at the national level. The ULI will ease the lending process, particularly for rural and micro, small, and medium enterprises (MSMEs).
“Just like UPI transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India,” said RBI Governor Shaktikanta Das, as reported by ANI. The ‘new trinity’ of JAM-UPI-ULI will be transformative to the entire digital infrastructure landscape, Das added in his speech at the Global Conference on Digital Public Infrastructure and Emerging Technologies event.
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The ULI platform has already been launched by the central bank on a pilot basis in 2023.
What is Unified Lending Interface (ULI)?
Digitalisation has its imprint on everything we do today, the government too is tapping on this new technology to offer a wide range of its facilities digitally and reduce paperwork. ULI is one such initiative by the RBI to extend credit to small and rural borrowers.
ULI will have a digital database of financial and non-financial information of borrowers. Additionally, it will provide the lenders with access to the land records of borrowers.
It will have an application programming interface (API) with a ‘plug and play’ method. The method will make the accessibility of data easy for lenders and decrease the complexity of technical integration.
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The ULI will be a nationwide platform, and lenders will have access to centralised data.
Who will be the beneficiaries of ULI?
ULI’s focus will be to cater to the needs of farmers, rural population, and MSMEs. This will give a financial push to the sector.
“In sum, 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,” said the RBI Governor at the event.
The MSME sector has become one of the primary focus areas for the central government in Budget FY24-25. The RBI’s digital platform with easy access to credit will help boost the sector.
At the same time, the platform will reduce the time of accessing credit by small and rural borrowers as it will bypass the documentation process.
The ULI launch will be one of the many initiatives by RBI to broaden the digital infrastructure in the country. The other products already launched by the governor include Bharat BillPay (BBPS) for business, and UPI Circle.
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