Page 33 - Banking Finance May 2025

ARTICLE

data, GST filings, and other digital footprints to assess financial ecosystem. ULI's success could further inspire
creditworthiness. This would empower small businesses to innovations in credit products, including peer-to-peer
access working capital, expand their operations, and lending, microfinance, and AI-driven credit
contribute to economic growth. assessments.

2. Driving Financial Inclusion 5. Global Implications
ULI is set to play a pivotal role in expanding financial India's innovative approach to financial inclusion through
inclusion. In rural areas and among low-income JAM, UPI, and ULI has the potential to set a global
households, access to formal credit has been limited. precedent. As other countries observe the success of
By integrating with the Aadhaar ecosystem and using this trinity, India's model could be replicated in emerging
digital transaction data from UPI, ULI can offer tailored economies to address similar challenges related to
credit products to individuals who have been excluded financial exclusion and access to credit.
from traditional banking systems. This would foster
equitable growth and reduce dependence on informal Conclusion
lending sources. The Unified Lending Interface (ULI), as part of the RBI's new
trinity alongside JAM and UPI, is set to revolutionize the way
3. Faster, More Transparent Lending credit is accessed and delivered in India. By simplifying the
ULI's platform-based approach eliminates much of the lending process, leveraging data analytics, and promoting
opacity that surrounds traditional lending practices. financial inclusion, ULI promises to unlock opportunities for
Borrowers will be able to compare loan products from millions of individuals and businesses. As it evolves, ULI will
various lenders, ensuring that they receive competitive be instrumental in shaping a more inclusive and equitable
interest rates and transparent terms. With automation credit system, furthering India's vision of a digitally
driving faster loan approvals, ULI will significantly reduce empowered economy.
the time and effort required to secure loans.
The new trinity JAM, UPI, and ULI represents a bold step
4. Boosting the Digital Economy toward a future where financial services are accessible,
Just as UPI has driven the adoption of digital payments, transparent, and efficient for all. ULI's role in democratizing
ULI is expected to boost the growth of digital lending. credit access makes it an essential pillar in India's journey
This shift to digital lending will not only improve credit toward comprehensive financial inclusion and economic
access but also create a more robust and resilient prosperity.

Gross NPAs Under MUDRA Scheme Edge Up Slightly to 2.21%

in FY25

The gross non-performing assets (GNPA) under the Pradhan Mantri Mudra Yojana (PMMY) rose marginally to 2.21%
in 2024-25, compared to 2.1% in the previous fiscal year, according to data released by the Finance Ministry. After
peaking at 3.61% in 2020-21, the GNPA ratio had shown a consistent decline until 2023-24. However, provisional
figures up to December 2024 indicate a slight uptick.
Under Mudra loans, any loan with three successive missed instalments is classified as a non-performing asset.
Meanwhile, the newly introduced 'Tarun Plus' category under PMMY has received a strong initial response. "As many
as 24,557 new borrowers took loan under the 'Tarun Plus' category amounting to Rs. 3,790 crore in a short period
of four months during FY25," Financial Services Secretary M Nagaraju told reporters.
Launched in October 2024 following the July Budget announcement, the Tarun Plus scheme doubled the loan limit to
Rs. 20 lakh for entrepreneurs who had successfully repaid their earlier 'Tarun' category loans.

30 | 2025 | MAY | BANKING FINANCE