RBI could've used existing infra for unified loan platform - fin min source
Informist, Monday, Oct. 7, 2024
By Sagar Sen and Priyasmita Dutta
NEW DELHI – The Reserve Bank of India did not necessarily have to launch an altogether new Unified Lending Interface platform, according to some officials in the finance ministry, who argue that similar systems already exist and could have been repurposed to serve new purposes. According to a senior ministry official, the government already has a product - the JanSamarth portal - that could have been "easily" expanded to incorporate wider varieties of credit products.
"The JanSamarth portal allows borrowers to choose a plan according to their requirements from a list of plans available on the portal. The Unified Lending Interface is also based on the same concept," the official told Informist. "It would have been much better if the RBI expanded the ambit of the JanSamarth portal...there was scope to do it easily," the official said.
Launched in June 2022, the JanSamarth portal is a one-stop platform for borrowers to get financing for 15 government schemes under seven loan categories and from over 200 lenders, including top state-owned and private sector lenders. All aspects of the borrowing process, from eligibility, application, and approval, can be performed through the platform. However, more than two years from its launch, the portal has not received much traction.
Meanwhile, the RBI's Unified Lending Interface--previously known as Public Tech Platform for Frictionless Credit--has been in the works for a year or so. Part of a broader strategy to create digital public infrastructure, the platform will enable friction-less credit for farmers and medium, small, and micro enterprises to begin with.
"Just like UPI (Unified Payments Interface) transformed the payment ecosystem, we expect that ULI will play a similar role in transforming the lending space in India," RBI Governor Shaktikanta Das had said in late August. The platform will facilitate seamless and consent-based flow of digital information, including land records, from multiple data service providers to lenders, he had added. A date for the full-scale launch of the platform is yet to be announced.
The aforementioned government official did not confirm whether the finance ministry would write to the RBI about integrating the two portals. The RBI did not respond to an e-mail asking if it had held discussions with the finance ministry on the Unified Lending Platform prior to announcing its launch and if creating a new platform was the only option available.
According to industry experts, there are significant differences between the two platforms. Pratik Shah, financial sector leader at EY India, said that while the Unified Lending Interface has immense potential to help small and medium enterprises in availing credit, and that it will likely be much more than just a portal.
In addition to the JanSamarth portal, the Small Industries Development Bank of India also has a "new-age digital lending platform" called psbloansin59minutes.com. Launched even earlier in late 2018, the portal uses algorithms to collate data on borrowers from several sources, including income tax returns and bank statements, to appraise applications, determine the size of the loan, and connect borrowers with a branch in under an hour. The platform provides loans to micro, small, and medium enterprises as well as to retail customers, with retail credit products including home, auto, and personal loans.
However, like the JanSamarth portal, lending through psbloansin59minutes.com has been slow. As of Aug. 30, the total loan disbursal through the platform is just INR 699.26 billion. End
