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RBI to Launch Pilot Project on Platform for Digital Lending

The Reserve Bank of India (RBI) recently announced the launch of its pilot project on the Public Tech Platform for Frictionless Credit. As per RBI’s press release, the platform was developed by its wholly-owned subsidiary, the Reserve Bank Innovation Hub (RBIH) and would enable linkage with Aadhaar e-KYC, PAN Validation, Satellite data, etc.

When it comes to digital credit facilities, the data that is required by the lender to do a credit appraisal are available with the government, banks and other entities thereby leading to obstacles in the frictionless and timely delivery of rule-based lending. The RBI’s pilot project has been introduced to solve these issues.

This digital platform will ensure that the flow of digital information to lenders will be seamless. It will have an open architecture, open Application Programming Interfaces (APIs) and standards, to which all the financial sector players can connect in a ‘plug and play’ model. Further, it is expected to reduce the costs involved, speed up the disbursement process and improve scalability. During the pilot project, the platform will focus on products such as Kisan Credit Card (KCC) loans up to Rs. 1.6 Lakh per borrower, dairy loans, MSME loans (without collateral), personal loans and home loans through participating banks.

Currently, pilot projects for the digitisation of KCC loans in select districts of Madhya Pradesh, Tamil Nadu, Karnataka, UP, and Maharashtra, and dairy loans in Gujarat are underway. The learnings from these projects have been taken into consideration in developing the Public Tech Platform.