RBI to develop platform to boost seamless digital loans amid burgeoning Fintech players

economictimes.indiatimes.com:

The innovative platform intends to facilitate the effortless provision of credit by ensuring a smooth transmission of necessary digital data to lenders, the Reserve Bank of India said. The digital platform will have an open structure, open Application Programming Interfaces (APIs) and standards, enabling all participants in the financial sector to effortlessly link up using a 'plug and play' model. The platform is poised to be introduced as a pilot project with a carefully measured approach, 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,» the RBI said. India has rapidly embraced digitalisation, fostering a concept of digital public infrastructure that encourages FinTech startups and enterprises to deliver innovative solutions for payments, credit, and other financial services. In the realm of digital credit provisioning, essential credit appraisal data are housed within diverse entities such as governmental bodies, account aggregators, banks, credit information firms, and digital identity authorities.

However, due to their compartmentalized systems, a hurdle arises in achieving a smooth and timely dissemination of rule-based lending. In response, an initial initiative was launched in September 2022, focusing on the digitization of Kisan Credit Card (KCC) loans below Rs 1.60 lakh. This pilot initiative scrutinized the complete digitization of lending processes in a paperless and user-friendly manner.