The Reserve Bank will launch a pilot project for ‘Public Tech Platform’ that seeks to facilitate credit through a seamless flow of required digital information to lenders.
During the pilot, the platform would focus on products such as Kisan Credit Card loans of up to Rs 1.6 lakh per borrower, dairy loans, MSME loans (without collateral), personal loans, and home loans through participating banks, the central bank said in a statement.
The platform would 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, Aadhaar e-signing, and house/property search data, among others.
“Based on the learnings, the scope and coverage would be expanded to include more products, information providers, and lenders during the pilot,” the RBI said and added the pilot of the platform would commence on August 17, 2023.
RBI said with rapid progress in digitalisation, India has embraced the concept of digital public infrastructure which encourages banks, NBFCs, FinTech companies, and startups 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, they are in separate systems, creating hindrances in the timely delivery of rule-based lending.
“The Public Tech Platform would enable the delivery of frictionless credit by facilitating a 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 RBI said.
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 would bring about efficiency in the lending process in terms of reduction of costs, quicker disbursement, and scalability.
The platform is being developed by the Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of the central bank.
An announcement in this regard was made by RBI Governor Shaktikanta Das while unveiling the bi-monthly monetary policy on August 10.