RBI set to Launch Pilot for a Public tech platform for ‘frictionless credit’

Mumbai(India), (15/08/23): The Reserve Bank of India (RBI) has announced intentions to launch the Public Tech Platform for Frictionless Credit in an effort to improve India’s financial landscape.

The Reserve Bank Innovation Hub (RBIH), a wholly owned subsidiary of the RBI, will be in charge of this initiative, which will be announced in the Statement on Developmental and Regulatory Policies on August 10, 2023. The programme will be launched as a trial project in stages beginning August 17.

In recent years, India has achieved remarkable advances in digitalisation, ushering in an era of revolutionary digital public infrastructure.

According to the RBI, this framework encourages diverse players, including banks, non-banking financial corporations (NBFCs), FinTech firms, and startups, to work together to build and deliver solutions in the areas of payments, credit, and other financial services.

The digital credit delivery environment is
defined by a plethora of data points required for credit evaluation, which are spread across various entities such as central and state governments, banks, credit information agencies, digital identification authorities, and others.

However, the central bank stated that the fragmented nature of these systems has hampered the seamless and timely dispensation of rule-based lending operations.

By expediting the flow of essential digital information to lenders, the Public Tech Platform is poised to change credit delivery. The platform is built on an open architecture and uses open Application Programming Interfaces (APIs) and industry standards to provide an end-to-end digital infrastructure.

According to the RBI, this inclusive framework invites all financial sector actors to effortlessly integrate into a ‘plug and play’ approach, boosting collaborative innovation and efficiency.

The initiative’s goals include streamlining the lending process, lowering operational expenses, speeding up disbursements, and allowing for scalability.

During the platform’s pilot phase, items like as Kisan Credit Card loans, Dairy Loans, collateral-free MSME loans, Personal loans, and Home Loans would be prioritised. These services will be provided by participating banks, resulting in a broad offering to meet the demands of various borrowers.

Aadhaar e-KYC, land records from selected state governments (Madhya Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, and Maharashtra), satellite data integration, PAN validation, transliteration, Aadhaar e-signing, and account aggregation facilitated by Account Aggregators (AAs) will be among the platform’s functionalities.

Milk pouring data from chosen dairy cooperatives, as well as property search data, will also be included into the site. As time goes on, the initiative’s reach will broaden to include other goods, information providers, and financing institutions.