RBI pilots a Public Tech platform to streamline digital credit delivery

By Gloria Mathias

Reserve Bank of India (RBI) has announced the development of a Public Tech platform for Frictionless Credit. The platform is being developed by the Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of RBI.

RBI plans to launch a pilot program, the Public Tech platform for Frictionless Credit. This initiative aims to streamline digital credit delivery by creating an open architecture using APIs to integrate various financial stakeholders, enhancing efficiency and innovation.

The pilot phase starts on August 17th 2023, focusing on loans like Personal loans, Kisan Credit cards, Dairy loans, MSME loans, and home loans. It will be extended to more loan products with services like Aadhaar e-KYC and satellite data integration.

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

The Public Tech platform would enable the delivery of frictionless credit by facilitating a 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 will bring about efficiency in the lending process in terms of reduction of costs, quicker disbursement, and scalability.

During the pilot, the platform shall focus on products such as Kisan Credit Card loans up to ₹1.6 lakhs per borrower, Dairy Loans, MSME loans, Personal loans and Home loans through participating banks.

The platform shall enable linkage with services such as Aadhaar e-KYC, land records from onboarded State Governments, Satellite data, PAN Validation, Transliteration, Aadhaar e-signing, account aggregation by Account Aggregators (AAs) etc. Based on the learnings, the scope and coverage would be expanded to include more products, information providers and lenders during the pilot.