RBI plans to launch Unified Lending Interface

The Reserve Bank of India (RBI) Governor Shaktikanta Das stated that Unified Lending Interface (ULI) will have a nationwide launch in due course. Like Unified Payment Interface (UPI), which has completely changed the nation’s retail payment system, the ULI will change the lending environment.

What did the RBI Governor Announce?

The RBI started a pilot program in August 2023 for a public technology platform for frictionless lending. Its goal was to make lending more efficient in terms of cost savings, speedier distribution, and scalability. 

On 26th August, the governor of the RBI announced renaming the technology platform for easy credit as the Unified Lending Interface (ULI). According to him, ULI will likely have a comparable impact on the nation’s financing landscape, much as UPI changed the payments environment. 

What is ULI?

As there is a rapid progress in digitalization in the country, we have adopted a new concept of digital public infrastructure which motivates banks, NBFCs, startups and fintech companies to form and offer innovative solutions for making payments, credit and other financial-related activities. 

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The data needed for a credit evaluation is available from a variety of sources, including banks, account aggregators, digital identification authorities, central and state governments, and credit information firms, for digital credit delivery. The fact that these data sets are housed in different systems, however, makes it difficult to deliver rule-based lending quickly and smoothly.

According to the governor of the RBI, the ULI platform will make it easier for lenders to receive digital information from diverse data service providers, including land records from different states, in a smooth and consent-based manner. It will shorten the credit appraisal process, particularly for rural and smaller borrowers.