RBI Governor Shaktikanta Das on Monday said the pilot of a technology platform which enables frictionless credit is now proposed to be called as the ‘Unified Lending Interface’ (ULI). He said the ULI is a further step on the journey of digitalisation of banking services.
This innovative digital platform is set to transform the way credit is accessed and disbursed in the country, particularly for underserved segments.
What is the Unified Lending Interface?
The ULI platform facilitates seamless and consent-based flow of digital information, including land records of various states, from multiple data service providers to lenders. This cuts down the time taken for credit appraisal, especially for smaller and rural borrowers.
The Unified Lending Interface is a cutting-edge digital platform designed to streamline the lending process across the financial ecosystem. It serves as a bridge connecting banks, non-banking financial companies (NBFCs), fintech firms, and borrowers, enabling a more efficient and transparent credit disbursement process.
How Does ULI Work?
The ULI platform integrates seamlessly with various financial databases and digital infrastructure, allowing lenders to access a borrower’s financial information in real time. This integration facilitates quicker credit assessments, reduces the need for physical documentation, and speeds up the loan approval process.
“By digitising access to the 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,” the RBI governor said on Monday.
Based on the experience from the pilot project, Das said a nationwide launch of the ULI will be done in due course.
“Just like UPI 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-UPI-ULI will be a revolutionary step forward in India’s digital infrastructure journey,” he said.
Why is ULI a Game-Changer?
Frictionless Credit Access: One of the primary objectives of the ULI is to eliminate the bottlenecks traditionally associated with the lending process. By providing a unified platform, the RBI aims to make credit more accessible to small businesses, entrepreneurs, and individuals who have historically faced challenges in securing loans.
Transparency and Efficiency: The ULI promotes transparency by allowing borrowers to track their loan applications in real-time. It also automates many of the steps involved in the lending process, significantly reducing the time and costs associated with credit disbursement.
Financial Inclusion: The ULI is in line with the RBI’s broader goal of promoting financial inclusion. By making credit more accessible, especially in rural and semi-urban areas, the ULI is expected to play a crucial role in empowering underserved communities.
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