Ishika Roy, Pune
The Reserve Bank of India (RBI) announced plans to begin an initiative called The Public Tech Platform for Frictionless Credit on August 10, 2023, under the monitoring of the Statement on Developmental and Regulatory Policies. The initiative is regulated and governed by the Reserve Bank Innovation Hub (RBIH), a subsidiary of RBI, and is set to be executed phase by phase, with the pilot project starting on Thursday, August 17th.
The project aims at streamlining digital credit delivery by using APIs in an attempt to bring together financial stakeholders and improve productivity and efficiency in terms of work output as well as innovation. The first phase of the initiative involves loans such as Kisan Credit Card, Dairy Loans, MSME loans, and personal and home loans, which include Aadhar, electronic KYC, and satellite data integration. The digital credit delivery framework involves secure credit assessment across institutions such as central and state governments, digital identity authorities, banks, and credit information agencies. Through this initiative, banking and non-banking stakeholders, FinTech firms, and startups will be encouraged to collaborate and provide easy solutions in terms of financial services such as payments and e-commerce.
“The end-to-end digital platform will have an open architecture, open Application Programming Interfaces (APIs), and open standards, to which all financial sector players can connect seamlessly in a ‘plug and play’ model,” the RBI declared in an official statement. In the present scenario, the data needed for credit appraisal can only be found with these institutions, which poses a problem for frictionless and convenient lending of money. The digital platform will bridge this gap by ensuring a seamless exchange of digital information with the financial players. The improved efficiency of the lending process will reduce costs, ensure speedy disbursement, and ensure scalability. Certain dairy cooperatives’ milk pouring and property search data will also be included in the Public Tech Platform.