Unified Lending Interface (ULI): A Transformative Platform for Seamless Credit Delivery

Sub: Eco

Sec: Monetary Policy

Introduction of Unified Lending Interface (ULI):
- RBI Governor announced that the Reserve Bank of India (RBI) is piloting a new technology platform called Unified Lending Interface (ULI).
- This platform is designed to facilitate friction-less credit and improve the delivery of banking services, especially to farmers and MSME borrowers.
Impact on the Lending Process:
- Meeting Unmet Credit Demand:
- By digitizing access to essential data, ULI is expected to address the large unmet demand for credit across various sectors.
Nationwide Introduction on the Anvil:
- A nationwide rollout of ULI is anticipated soon, which will extend its benefits across the country.

About ULI

What is ULI?

Unified Lending Interface (ULI) is a digital platform aimed at smoothing the lending processes in India.
The platform is designed to cater to the large unmet demand for credit across various sectors, with a particular focus on agricultural and medium, small, and micro enterprises (MSME) borrowers.

Why Was ULI Launched?

The launch of ULI is part of the RBI’s broader strategy to enhance financial inclusion and improve credit delivery across India, particularly for underserved sectors and regions.

Key Features of ULI:

Reduction in Turnaround Time (TAT):
- ULI is expected to reduce the turnaround time for processing and sanctioning loans by simplifying the complexities involved for both lenders and borrowers.
Seamless Flow of Information:
- The platform facilitates the seamless flow of digital information required by lenders, including not only financial data but also land records from multiple data providers.
Common and Standardized APIs:
- ULI’s architecture is designed for a plug and play approach with common and standardized application programming interfaces (APIs), ensuring quicker access to diverse sources of information.

How Will ULI Work?

ULI will ease the flow of necessary information from multiple data providers to lenders, significantly reducing the time taken for credit appraisal, especially for rural and smaller borrowers.
By enabling quicker access to diverse information, ULI is set to streamline the lending process and make it more efficient.

Connection to RBI’s Frictionless Credit Platform:

RBI’s Frictionless Credit Platform:
- Launched in August 2023, this platform aimed to simplify the lending process, allowing banks to lend to borrowers within seconds.
Renaming to ULI:
- The frictionless credit platform has now been renamed as ULI and expanded to include not only banks but also non-bank lenders like fintechs and NBFCs.

Broader Vision Behind ULI:

Integration with India’s Digital Infrastructure:
- ULI is part of a broader initiative to integrate it with other digital infrastructure components like Jan Dhan-Aadhaar-Mobile (JAM), Unified Payments Interface (UPI), and Central Bank Digital Currency (CBDC).
Revolutionizing Digital Public Infrastructure:
- This integration is seen as a revolutionary step in India’s Digital Public Infrastructure (DPI) journey, further enhancing the ease and accessibility of financial services.