RBI to launch pilot project for public tech platform enabling frictionless credit

RBI

The Reserve Bank of India (RBI) to launch the pilot project for public tech platforms for frictionless credit today. The same will be done through the Reserve Bank Innovation Hub (RBIH), an RBI wholly-owned subsidiary. By providing a seamless flow of essential digital information to lenders, the platform will enable the delivery of frictionless financing.

According to the RBI, the “end-to-end digital platform will have an open architecture, open Application Programming Interfaces (APIs), and standards, to which all financial sector players will be able to connect seamlessly in a ‘plug and play’ model.”

During the trial, the platform will focus on Kisan Credit Card loans of up to Rs 1.6 lakh per borrower, Dairy Loans, MSME loans (without collateral), personal loans, and home loans from participating banks.

According to the central bank, the platform will also 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, Transliteration, Aadhaar e-signing, account aggregation by Account Aggregators (AAs), milk pouring data from select dairy co-operatives, house/property search data etc.

According to the Reserve Bank of India, India has adopted the notion of digital public infrastructure, which promotes banks, NBFCs, fintech businesses, and startups to innovate and supply new solutions in payments, loans, and other financial activities with quick progress in digitisation.

Anil Pinapala, CEO & Founder, FlexPay by Vivifi said, “The RBI’s initiative to launch the Public Tech Platform for deepening credit penetration is a welcome move and a positive step forward. We are optimistic about its expansion beyond the initial phase, and also hope that NBFCs and Fintech firms like ours will get the chance to participate.”

He further mentioned that, “The platform is uniting disparate pieces of digital data from across the ecosystem into a cohesive, unified view. By integrating banking, credit, and even corporate and governmental information, it facilitates swift and dependable underwriting which will, in turn, extend credit accessibility to segments of the population that were previously underserved. This aligns well with our government’s vision of establishing a digital public infrastructure, which empowers banks, NBFCs, Fintech enterprises, and Start-ups to devise and deliver innovative solutions in payment, credit, and other financial domains.”

Karthikeyan K, Co-founder & CTO, KreditBee said that, “The Public Tech Platform would facilitate a smooth flow of necessary digital information to lenders, enabling the supply of ‘frictionless finance’. It will make the lending process more efficient by lowering costs, enabling faster distribution, and improving scalability. Additionally, this platform will promote multiple players, including banks, non-banking financial companies (NBFCs), FinTech businesses, and startups, to work together to develop and provide solutions in the areas of payments, credit, and other financial service.”

Souparno Bagchi, COO, Balancehero India, stated, ““The launch of RBI’s Public Tech Platform for Frictionless Credit is a ground-breaking step with substantial advantages for lenders. This initiative simplifies the integration of vital financial data through open APIs, boosting operational efficiency. Centralizing potential borrowers’ information on a unified platform streamlines processes. With active participation from banks, NBFCs, Fintech firms, and start-ups, this collaborative strategy aligns with our dedication to seamless credit and payment solutions. The ‘plug and play’ model encourages innovation, driving the lending sector toward greater accessibility, cost reduction, and efficiency.”

“Additionally, in sync with the government’s digital public infrastructure concept, it holds the potential to significantly boost financial inclusion by catering to underserved and unserved segments. This platform mirrors our commitment to innovation and social impact, holding the potential to reshape the lending industry and contribute to a more inclusive financial landscape”, he added.

Sugandh Saxena, CEO, FACE, stated, “Announcement of the Launch of the Pilot Project for a Public Tech Platform for Frictionless Credit is a promising and exciting development for the fintech/digital lending sector. The Platform will open new horizons for use cases, products, underwriting, and market segments. For digital lending, harnessing and optimising its potential relies on legitimate access to innovative and relevant data sets. With its built-in features on customer protection, verified data, privacy and security, and open standards, Platform can bring immense value to the digital lending ecosystem and customers by converging existing and new data sets and unlocking data hitherto siloed and unstructured. Fintechs have played a key role in mainstreaming digital into credit, serving a vast undressed market – retail customers and small businesses. We still have immense opportunities to responsibly meet the credit needs of the country’s suitable products. As a fintech lending community, we look forward to learning from the pilot phase and participating as the Platform expands for the NBFCs and fintechs, competing for better innovation, experience, products and services for consumers.”

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