RBI Governor Shaktikant Das spoke about the launch of the Unified Lending Interface (ULI), a tech platform that will digitize the country’s credit transactions. ULI is designed to manage loans similarly to how UPI manages digital payments. It will be gradually introduced across the country, significantly reducing the loan period for farmers and small enterprises, making it possible to obtain a loan within minutes.
UPI’s Impact and the Introduction of ULI
Launched in 2016, UPI has boosted cashless transactions across many countries. Last year, RBI announced that it would bring a similar platform for credit transactions, and now, ULI is ready to be launched. The name ULI was revealed by Shaktikant Das at the Global Conference on Digital Public Infrastructure and Emerging Technologies held in Bangalore.
How ULI Will Transform Lending
This new system integrates customer data from multiple sources, providing a complete view in one place. Traditionally, obtaining a loan requires submitting numerous documents and making multiple trips to banks or non-bank financial institutions. While fintech platforms have recently started providing unsecured loans to salaried individuals within minutes, farmers and small businesses still face lengthy processes and delays. ULI is being introduced specifically to address these challenges.
As customer information will be available in one place, the verification process by banks will be reduced, speeding up loan approvals. This system also aims to address the various ethical and technical challenges faced by banks and financial institutions operating within the RBI framework. ULI will also help regulate unregulated digital lending companies.
Ensuring Privacy and Security in ULI
With the borrower’s consent, lending banks can access their data, ensuring that customer privacy is protected. This indicates that ULI has the potential to bring about a revolutionary change in the loan market, making lending more efficient, secure, and accessible, especially for underserved segments like farmers and small businesses.