Page 38 - BANKING FINANCE NOVEMBER 2023

ARTICLE

PUBLIC TECH

PLATFORM FOR

FRICTIONLESS &

EASY CREDIT FLOW

T he Reserve Bank of India (RBI) has announced a meeting in August 2023.The whole process here rests on

three pillars :
pilot programme for 'Public Tech Platform for
Frictionless Credit'. It is a digital platform created
Y Adverse selection (information asymmetry between
borrowers and lenders)
by RBI's subsidiary Reserve Bank Innovation Hub
(RBIH) which will enable seamless flow of necessary Y Exposure risk measurement
information to lenders and thereby help in disbursing
frictionless credit. Frictionless credit is a borrowing approach Y Default risk assessment.
that seeks to streamline the lending process for consumers.
Unlike the traditional credit systems, where individuals need Features
to go through extensive paperwork, credit checks, and a) It is an end-to-end digital platform that will have an
lengthy approval procedures, frictionless credit promises a open architecture, open Application Programming
smoother and faster experience. The initiative comes as part Interfaces (APIs), and standards to which all banks can
of RBI's developmental and regulatory policies and was connect in a "Plug and Play" Model
introduced following the Monetary Policy Committee (MPC)
b) The platform would integrate data from central and
state governments, Account Aggregators (AA), banks,
About the author credit information companies, and digital identity

authorities. This consolidation would eliminate
Ravi Mishra hindrances and streamline rule-based lending processes.
Chief Manager Faculty,
Union Bank of India c) The platform's scope encompasses loan to diversified
Union Learning Academy, sectors which includes Kisan Credit Card loans of up to
Corporate & Treasury, Gurugram Rs. 1.6 lakh per borrower, loans to dairy farmers, credit-

34 | 2023 | NOVEMBER | BANKING FINANCE