The Reserve Bank of India on Monday said the pilot project for public tech platform for frictionless credit will commence on August 17.

During the pilot, the platform, which is being developed by Reserve Bank Innovation Hub (a wholly-owned subsidiary of RBI), will focus on products such as kisan credit card loans up to ₹1.6 lakh per borrower, dairy loans, MSME loans (without collateral), personal loans and home loans through participating banks, per a central bank statement.

Enabling linkage with services

The platform will enable linkage with services such as Aadhaar e-KYC, land records from onboarded State governments (Madhya Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, and Maharashtra), satellite data, PAN validation, transliteration, Aadhaar e-signing, account aggregation by Account Aggregators (AAs), milk pouring data from select dairy co-operatives, and house/property search data.

Based on the learnings, the scope and coverage would be expanded to include more products, information providers and lenders during the pilot.

“The platform would enable delivery of frictionless credit by facilitating seamless flow of required digital information to lenders.

“The end-to-end digital platform will have an open architecture, open application programming interfaces (APIs) and standards, to which all financial sector players can connect seamlessly in a ‘plug and play’ model,” RBI said.

The platform is intended to be rolled out as a pilot project in a calibrated fashion, both in terms of access to information providers and use cases.

The central bank said the platform will bring about efficiency in the lending process in terms of reduction of costs, quicker disbursement and scalability.

The central bank said with rapid progress in digitalisation, India has embraced the concept of digital public infrastructure which encourages banks, NBFCs, fintech companies and start-ups to create and provide innovative solutions in payments, credit, and other financial activities.

Credit appraisal

For digital credit delivery, the data required for credit appraisal are available with different entities such as Central and State governments, account aggregators, banks, credit information companies and digital identity authorities.

However, they are in separate systems, creating hindrance in frictionless and timely delivery of rule-based lending.