The Reserve Bank of India (RBI) is developing a public tech platform for frictionless credit in association with the Reserve Bank Innovation Hub (RBIH), noted Governor Shaktikanta Das, in the monetary policy committee (MPC) meeting announcements on Thursday.
“The Platform is intended to be rolled out as a pilot project in a calibrated manner. It will have an open architecture and open Application Programming Interface (API) and Standards, to which all financial sector players can connect seamlessly. This initiative will accelerate the penetration of credit to hitherto underserved regions and further deepen financial inclusion,” said Governor Das.
The central bank, along with RBIH, started a pilot project for frictionless credit delivery through end-to-end digital process, starting with the Kisan Credit Card (KCC) loans, in September 2022. The pilot for KCC loans is currently operational in districts of Madhya Pradesh, Tamil Nadu, Karnataka, UP and Maharashtra. Dairy loans have also been included on a pilot basis in select districts of Gujarat.
The public tech platform is being developed based on the learnings of these pilot projects to expand the scope of end-to-end digital lending processes.
Recently, the central bank put up a stall at Gandhinagar’s Mahatma Mandir Convention Centre, venue of the third meeting of G20 finance ministers and central bank governors (FMCBG) to showcase its recent innovative initiatives on the frictionless cred and the CBDC (Central Bank Digital Currency) pilots.
They set up an experience centre to give a real-life use case of the Kisan Credit Card as part of the frictionless card experience. It showcased how digitised land record data can be used to sanction and disburse in a completely paperless manner without the farmer having to visit the bank branch.
The digital journey includes opening of accounts through e-KYC, accessing digitised land records of state governments, credit bureau scores, and other information, which are integrated and fully automated.
The public tech platform would enable frictionless credit to various types of loans including MSME, personal loans, KCC, dairy loans by making use of various digital data points. Financial sector players would be able to connect seamlessly bringing in a completely digital credit delivery process.
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