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Economy
Mahesh

26/08/24 14:34 PM IST

RBI to launch Unified Lending Interface

In News
  • Reserve Bank of India (RBI) Governor Shaktikanta Das  said that a nationwide launch of the Unified Lending Interface (ULI) will happen in due course.
ULI
  • With rapid progress in digitalisation, 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 and digital identity authorities.
  • However, these data sets are in separate systems, creating hindrance in frictionless and timely delivery of rule-based lending.
  • ULI platform will facilitate a seamless and consent-based flow of digital information, including land records of various states, from multiple data service providers to lenders.
  • It will cut down the time taken for credit appraisal, especially for smaller and rural borrowers.
  • ULI architecture has common and standardised APIs (Application Programming Interface), designed for a ‘plug and play’ approach to ensure digital access to information from diverse sources.
  • The platform will reduce the complexity of multiple technical integrations, and will enable 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.
  • The ‘new trinity’ of JAM-UPI-ULI will be a revolutionary step forward in India’s digital infrastructure journey.
  • The JAM (Jan Dhan, Aadhar and Mobile) trinity is a tool used by the government to transfer cash benefits directly to the bank account of the beneficiary.
UPI
  • Unified Payments Interface or UPI is a real-time payment system launched in India in April 2016 by the National Payments Corporation of India (NPCI).
  • It is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
  • UPI also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.
  • It helps in immediate money transfer through mobile device round the clock. It allows a single mobile application for accessing different bank accounts.
  • UPI has played a significant role in the growth of retail digital payments in the country.
  • While initial participants on the UPI platform were banks, non-bank third-party app providers and use of QR (quick-response) codes have all combined in popularising UPI.
Source- Indian Express

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