RBI's Pilot Project On Public Tech Platform For Frictionless Credit To Start Today

Reserve Bank of India (RBI) will launch a pilot project on the Public Tech Platform for frictionless credit on Thursday, August 17. This action aims to quickly enable credit or loans by giving lenders access to digital information.

The Reserve Bank Innovation Hub, the central bank's wholly-owned subsidiary, has developed the Public Tech Platform for frictionless credit, an end-to-end digital platform.

Lenders frequently seek plenty of information before authorising a credit or loan. At the moment, data needed to sanction a loan or credit are available from a variety of sources such as Central and state governments, banks, account aggregators, and credit information bureaus.

The whole process has hampered the smooth and timely delivery of rule-based financing. Loans are processed over a period of days, weeks, or even months. To make this process quicker and smooth, the central bank has developed a public tech platform where lenders may instantly access essential digital information to facilitate financing.

"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 shall bring about efficiency in the lending process in terms of reduction of costs, quicker disbursement, and scalability," RBI said in a press release.

"During the pilot, the platform shall focus on products such as Kisan Credit Card loans up to ₹1.6 lakh per borrower, Dairy Loans, MSME loans (without collateral), Personal loans and Home loans through participating banks," the RBI release said .

"The platform shall 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," RBI added in release.

Further added, "Based on the learnings, the scope and coverage would be expanded to include more products, information providers and lenders during the pilot,"