Bank to Launch Unified Lending Interface soon
RBI Governor Shaktikanta Das announced on Monday that the Unified Lending Interface (ULI), designed to enable frictionless credit, will soon be introduced. This initiative follows the pilot project for a public tech platform for frictionless credit, which was unveiled in August last year.
Speaking at the Global Conference on Digital Public Infrastructure and Emerging Technologies, Das emphasized that ULI is poised to transform the lending landscape in India, much like how the Unified Payment Interface (UPI) revolutionized the payment ecosystem.
“Continuing on the journey of digitalizing banking services, we launched the pilot of a technology platform last year that facilitates frictionless credit. Moving forward, we will refer to it as the Unified Lending Interface (ULI),” Das remarked.
When the pilot project was initially announced, the RBI highlighted that the data required for digital credit delivery is dispersed across various entities, including Central and State governments, account aggregators, banks, credit information companies, and digital identity authorities. The lack of integration between these systems has been a significant barrier to the timely and frictionless delivery of rule-based lending.
Das explained that ULI will enable seamless, consent-based access to digital information—such as land records—from multiple data providers to lenders, significantly reducing the time required for credit appraisal, especially for small and rural borrowers.
The ULI platform will feature common and standardized APIs (Application Programming Interfaces) designed for a ‘plug and play’ approach. This will simplify digital access to information from diverse sources, eliminating the need for multiple technical integrations. Borrowers will benefit from quicker credit delivery with minimal documentation requirements.
“In essence, by digitizing access to financial and non-financial data that currently resides in separate silos, ULI is expected to meet the large unmet demand for credit across various sectors, particularly for agricultural and MSME borrowers,” Das added.
Das also cautioned financial institutions about the integration of artificial intelligence (AI) in critical decision-making processes like loan sanctioning. While AI has the potential to simplify processes and emulate decision-making, he stressed the importance of careful adoption, particularly in regulated financial sectors.
“AI is data-driven, and it’s crucial to ensure the authenticity of the data used in training models. There is also the potential for bias and data privacy concerns that need to be carefully examined,” he warned.
Das emphasized the need for financial institutions to clearly outline liabilities and ensure a responsible and calibrated approach to adopting new technologies like AI. He pointed out that AI presents challenges such as data privacy issues and the spread of misinformation, which could disrupt Digital Public Infrastructure (DPIs) and other digital systems.
“Ethical AI governance is crucial to ensuring fairness and preventing bias. Financial institutions must ensure that AI models are explainable, meaning that the reasoning behind certain decisions is clear,” Das concluded.
