After UPI, RBI to launch ULI; here's all you need to know about Unified Lending Interface

PTC News Desk: The Reserve Bank of India (RBI) is set to launch a technology platform for providing "frictionless credit", said Reserve Bank of India Governor Shaktikanta Das on Monday.

Das announced at the Global Conference on Digital Public Infrastructure and Emerging Technologies in Bengaluru that this technology platform will be known as the "Unified Lending Interface (ULI)." Governor Das stated, "Just like UPI transformed the payments ecosystem, we expect that ULI will play a similar role in transforming the lending space in India. The 'new trinity' of JAM-UPI-ULI will be a revolutionary step forward in India's digital infrastructure journey."

The ULI platform enables the seamless and consent-based movement of digital information, including land records from numerous states, from multiple data service providers to lenders. The technology platform, which was implemented last year as a pilot project, reduces the time required for credit appraisal, particularly for small and rural borrowers.

What is ULI?

ULI or Unified Lending Interface is a digital platform that is designed to enhance lending processes. The platform aims to meet a substantial unmet loan demand in a variety of sectors, with a focus on agriculture and medium small and micro enterprises (MSME) borrowers.

In other words, the platform is designed to lower the turnaround time (TAT) for loan processing and sanctioning while also simplifying the process for the parties involved, namely lenders and borrowers.

How will the ULI work?

The platform will facilitate the flow of information needed by a lender to process a loan. The goal of ULI is to promote the seamless flow of digital information, not only financial parameters but also specifics such as land records, from numerous data providers to lenders. This is expected to cut credit appraisal time, particularly for rural and smaller borrowers.

Additionally, the architecture is built for a plug-and-play approach, allowing for faster access to information from a variety of sources. The platform will use common and standardised application programming interfaces (APIs) to ensure access to information from a variety of sources.

Why was ULI formed?

The RBI Governor stated that formerly, policymakers had a trinity of Jan Dhan-Aadhaar-Mobile or JAM. The central bank now provides loans to add layers to this trinity.

“New trinity -- JAM, UPI (Unified Payments Interface) and ULI, Central Bank Digital Currency (CBDC) to be rolled out gradually, is a revolutionary step in India’s Digital Public Infrastructure (DPI) journey,” Das stated.