New Delhi (Agency): The Reserve Bank of India (RBI) has announced the pilot launch of a ‘Public Tech Platform’. This platform is designed to simplify and improve the process of digital lending by ensuring a smooth flow of necessary digital information to banks and other lenders.
The primary goal during this pilot phase is to concentrate on specific products. This includes Kisan Credit Card loans (up to Rs 1.6 lakh per person), dairy loans, MSME loans that don’t require collateral, personal loans, and home loans provided by participating banks.
One of the unique features of this platform is its ability to connect with various services. It will link to Aadhaar e-KYC, land records from certain state governments like Madhya Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, and Maharashtra, satellite data, PAN validation, Aadhaar e-signing, and data related to house and property searches.
RBI shared, “Based on the learnings, the scope and coverage would be expanded to include more products, information providers and lenders during the pilot.” The pilot program is set to begin on August 17, 2023.
With the digital revolution sweeping India, there has been a surge in the amount of data and entities involved in the lending process. From central and state governments to banks and digital identity authorities, all have data necessary for digital credit. But these data sources are separate, slowing down rule-based lending.
RBI aims to address this with the Public Tech Platform. “The Public Tech Platform would enable delivery of frictionless credit by facilitating seamless flow of required digital information to lenders,” stated RBI.
The system is constructed to support an open architecture. This means open Application Programming Interfaces (APIs) and standards will be in place, allowing all financial sector participants to connect easily.
The platform promises various advantages. It seeks to make the lending process more efficient, reduce costs, speed up disbursement, and allow for greater scalability.
This innovation is a creation of the Reserve Bank Innovation Hub (RBIH), which is directly under the central bank. RBI Governor Shaktikanta Das had spoken about this upcoming project during the announcement of the bi-monthly monetary policy on August 10.