RBI to launch Unified Lending Interface nationwide: Shaktikanta Das announces

RBI introduces Unified Lending Interface for speedy credit access for rural, smaller borrowers

Reserve Bank of India (RBI) Governor Shaktikanta Das announced on Monday that the central bank will soon roll out the Unified Lending Interface (ULI) across the country. This new platform is anticipated to revolutionize the lending sector in India, similar to the transformative impact of the Unified Payments Interface (UPI) on the payments ecosystem.

The RBI initially launched the ULI pilot program last year to facilitate seamless credit transactions. Based on the positive outcomes from this pilot, the decision has been made to expand ULI nationwide.

Speaking at the Global Conference on “Digital Public Infrastructure and Emerging Technologies,” Das said, “Just as UPI has reshaped the payments landscape, we foresee ULI playing a comparable role in the lending sector. The integration of JAM-UPI-ULI represents a significant advancement in India’s digital infrastructure.”

According to Das, ULI facilitates a seamless and consent-based flow of digital information, including even 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.

Das further explained that the ULI architecture has common and standardized APIs, designed for a ‘plug and play‘ approach to ensure digital access to information from diverse sources resulting in reducing the complexity of multiple technical integrations.

As a result, it enables borrowers to get the benefit of seamless delivery of credit, and quicker turnaround time without requiring extensive documentation, he said.

“In sum, by digitizing access to 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,” Das added.

Speaking on central bank digital currency (CBDC), Das highlighted that there should not be any rush to roll out system-wide CBDC before one acquires a comprehensive understanding of its impact on users, monetary policy, the financial system, and the economy.

“Such understanding would emerge from the generation of user data in pilots. The actual introduction of CBDC can be phased in gradually. Undoubtedly, CBDC has the potential to underpin the payment systems of the future, both for domestic payments and also cross-border payments,” Das added.

RBI launched CBDC pilots both in retail and wholesale segments back in 2022. The retail pilot currently has over 5 million users and 16 participating banks.

“While the retail pilot started with the initial use case of payments, currently both the offline and programmability functionalities are also being tested. The programmability feature of CBDC could serve as a key enabler for financial inclusion by ensuring delivery of funds to the targeted user,” Das said.

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