RBI set to unveil ULI for MSMEs, farmers

Just like UPI transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India. The new trinity of JAM-UPI-ULI will be a revolutionary step forward in India’s digital infrastructure journey - Shaktikanta Das, Governor, RBI

Bengaluru: Reserve Bank of India (RBI) is poised to launch a new nationwide Unified Lending Interface (ULI), on the same lines as UPI, to enhance lending to various sectors of the economy, especially the agricultural and MSME borrowers, RBI Governor Shaktikanta Das said on Monday.

In his address at a global conference here, Das said that the RBI had successfully carried out a pilot project and based on this experience, a nationwide launch of the ULI system will be done in due course.

“Just like UPI transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India. The ‘new trinity’ of JAM-UPI-ULI will be a revolutionary step forward in India’s digital infrastructure journey,” Das remarked.

Continuing on this journey of digitalisation of banking services, last year we launched the pilot of a technology platform, which enables frictionless credit. This platform 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 explained.

He further stated that the ULI architecture has common and standardised APIs, designed for a ‘plug and play’ approach to ensure digital access to information from diverse sources. This reduces the complexity of multiple technical integrations. It enables borrowers to get the benefit of seamless delivery of credit, and quicker turnaround time without requiring extensive documentation.

“In sum, by digitising 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 remarked.

He cited the Account Aggregator (AA) framework, a regulatory initiative of the Reserve Bank as another example of DPI in India. This framework facilitates consent-based sharing and aggregation of financial information of customers among eligible financial system participants in a secure, transparent, and efficient manner.