On August 26, Reserve Bank of India (RBI) Governor Shaktikanta Das introduced a new initiative aimed at making borrowing easier for people and businesses in India. The project, known as the Unified Lending Interface (ULI), is designed to provide frictionless credit, meaning loans can be processed quickly and easily without unnecessary complications. ULI will work like UPI. Indian Citizens can easily avail loan facilities via this ULI interface just like payments are done via UPI. It will be a simple and easy process to avail credit facilities from banks.
What is the Unified Lending Interface (ULI)?
Governor Das announced the introduction of ULI during his speech at the Global Conference on Digital Public Infrastructure (DPI) and Emerging Technologies in Bengaluru, part of the RBI’s 90th-anniversary celebrations. ULI is a tech platform that aims to simplify the process of obtaining loans, making it faster and more secure.
How Does ULI Work?
ULI is designed to benefit small borrowers by cutting down the time it takes for credit appraisal—the process banks use to decide whether to grant a loan. Here are some key features of ULI:
- Faster Credit Appraisal: ULI will significantly reduce the time taken to approve loans, especially for small borrowers, by streamlining the appraisal process.
- Consent-Based System: The entire system operates on a consent basis, ensuring that data privacy is protected. Borrowers’ information will only be shared with their permission.
- Simplified Tech Integration: By reducing the complexity of multiple technology integrations, ULI will make it easier for banks and financial institutions to participate in the platform.
Learning from the Success of UPI
The introduction of ULI follows the success of the Unified Payments Interface (UPI), launched in April 2016 by the National Payments Corporation of India (NPCI). UPI has revolutionized digital payments in India, making quick and safe fund transfers possible. Governor Das believes that ULI will play a similar transformative role in the lending ecosystem.
A New Digital Trinity: JAM, UPI, and ULI
Governor Das highlighted how ULI, along with UPI and the JAM trinity (Jan Dhan-Aadhaar-Mobile), represents a major step forward in India’s digital journey. Together, these systems aim to provide seamless access to financial services for millions of Indians, helping to boost financial inclusion and economic growth.
What’s Next for ULI?
The nationwide launch of ULI will take place “in due course,” according to Governor Das. The RBI first tested the tech platform for frictionless credit with a pilot project launched on August 17, 2023, through the Reserve Bank Innovation Hub (RBIH), a subsidiary of the RBI. This pilot project was a significant step toward making loan processes easier by ensuring that all necessary digital information can flow smoothly to lenders.
Conclusion
The introduction of the Unified Lending Interface (ULI) marks a significant advancement in India’s efforts to modernize its financial systems. By making borrowing faster, simpler, and more secure, ULI promises to transform the way credit is accessed in India, benefiting small borrowers and contributing to the country’s digital economy. As the RBI prepares for a full-scale rollout of ULI, it is clear that the future of lending in India is set to become more accessible and efficient.
 like UPI, RBI ULI working news updates){kind=link}