The RBI has decided to provide a platform to iron out the inefficiencies in information dissemination when it comes to the process of lending. In its recent notification, the RBI has mentioned that it plans to provide a platform on a pilot mode basis from 17th August, 2023 onwards for a seamless flow of credit.
The platform has been termed as “Public Tech Platform” by the RBI and is developed by the RBI Innovation Hub, a wholly-owned subsidiary of the RBI incorporated to introduce innovations in the financial sector.
What is the Public Tech Platform for frictionless credit?
The RBI will be providing a platform named “Public Tech Platform” with Banks, Fintech companies, NBFCs as its participants for a seamless lending process.
The proposed platform would conform to Open API standards and would allow easy integrations in order to provide a plug-and-play model.
The platform aims to address the gap in data sharing that exists in the digital delivery of credit.
Since the data required for digital credit delivery lies with different entities (including Centre/State governments, Banks, Account Aggregators, etc.), the process of sharing data for credit delivery often comes with a lag. The proposed platform seeks to remove the functioning in silos approach wherein different types of data like land records, PAN details, Aadhaar details, etc. could be provided to the lenders by Fintech Companies.
The Public Tech Platform would allow several types of services to be offered, including Account Aggregation, PAN Validation, E-KYC services, Transliteration, e-signing of documents, database of property records, etc.
It is also bound to reduce paper usage and the cost involved in the lending process.
What type of credit would be provided on the Public Tech Platform?
The Public Tech Platform would initially focus upon providing Home Loans, Personal Loans, MSME Loans (without collateral), Kisan Credit Card loans (upto INR 1.6 lakhs per borrower), and Dairy Loans.
Since the platform has no entry barriers while the digital lending process is encompassing various types of debt products under its ambit, the RBI has shown its willingness to incorporate more credit products moving forward.
Based upon the experience of the Pilot project commencing from 17th August, the RBI would decide the scale of the operations on the platform and the products and services to be offered in future, along with any other use-case that it may have.
