RBI To Launch Pilot Project For Public Tech Platform For Frictionless Credit

New Delhi, Aug 14 (KNN) The Reserve Bank of India (RBI) will launch a pilot project for a Public Tech Platform for Frictionless Credit on August 17, 2023. The platform will enable lenders to access data from multiple sources, such as Aadhaar e-KYC, land records, satellite data, and PAN validation, to make lending decisions more quickly and efficiently. This will benefit startups that are developing lending products, as they will be able to use the platform to access the data they need to assess borrowers' creditworthiness.

The Platform is being developed by Reserve Bank Innovation Hub (RBIH), a wholly owned subsidiary of RBI, said the press release.

During the pilot, the platform shall focus on products such as Kisan Credit Card loans up to Rs. 1.6 lakh per borrower, Dairy Loans, MSME loans (without collateral), Personal loans and Home loans through participating banks.

With rapid progress in digitalization, India has embraced the concept of digital public infrastructure which encourages banks, NBFCs, FinTech companies and start-ups to create and provide innovative solutions in payments, credit, and other financial activities. 

For digital credit delivery, the data required for credit appraisal are available with different entities like Central and State governments, account aggregators, banks, credit information companies, digital identity authorities, etc. However, they are in separate systems, creating hindrance in frictionless and timely delivery of rule-based lending.

The Public Tech Platform would enable delivery of frictionless credit by facilitating 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.

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. Based on the learnings, the scope and coverage would be expanded to include more products, information providers and lenders during the pilot.  (KNN Bureau)