RBI Launches Pilot Project for ‘Public Tech Platform’ Enabling Frictionless Credit Processing
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- Last Updated on 18 August, 2023
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Press Release: 2023-2024/750, Dated: 14.08.2023
The RBI has announced the launch of a pilot project for Public Tech Platform for Frictionless Credit starting from 17.08.2023. The platform is being developed by the Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of the RBI.
The rationale behind this initiative is that India has so far lacked a comprehensive and inclusive digital public infrastructure that can bring together all stakeholders involved. For efficient digital credit delivery, the necessary data for credit assessment is distributed across various entities like Central and State Governments, account aggregators, banks, credit information companies and digital identity authorities.
However, these entities operate within separate systems, leading to obstacles in the smooth and prompt execution of rule-based lending.
The Public Tech Platform would enable the delivery of frictionless credit by facilitating a seamless flow of required digital information to lenders. The end-to-end digital platform will have an open architecture, open Application Programming Interfaces (APIs) and standards, to which all financial sector players can connect seamlessly in a ‘plug and play’ model.
The Platform is intended to be rolled out as a pilot project in a calibrated fashion, both in terms of access to information providers and use cases. It shall bring about efficiency in the lending process in terms of reduction of costs, quicker disbursement, and scalability.
During the pilot phase, the platform shall focus on products such as Kisan Credit Card loans of up to Rs 1.6 lakh per borrower, dairy loans, MSME loans (without collateral), personal loans, and home loans through participating banks.
Further, the platform shall enable linkage with services such as Aadhaar e-KYC, land records from onboarded State Governments (Madhya Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, and Maharashtra), Satellite data, PAN Validation, Transliteration, Aadhaar e-signing, account aggregation by Account Aggregators (AAs), milk pouring data from select dairy co-operatives, house/property search data etc.
This initiative aims to reshape India’s credit landscape with the launch of the RBI’s pilot project for a Public Tech Platform for frictionless credit. By fostering seamless connections among stakeholders through an open digital platform, the goal is to streamline lending processes, reduce costs, and facilitate faster disbursements thereby advancing financial inclusivity.
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