Unified Lending Interface (ULI) will simplify the entire process of taking a loan. It is designed to reduce the time and paperwork required in credit processing. It combines open architecture with open application programming interface (API). Due to this, financial institutions can easily connect in a plug and play model.
Right now the process of taking a loan is quite complicated. You have to complete all the paperwork. You have to visit banks daily. But, the government is now going to make this process very easy. Reserve Bank (RBI) Governor Shaktikanta Das has announced the introduction of Unified Lending Interface (ULI) platform like payment app UPI.
RBI launched a pilot project of a technical platform last year (August 2023) to provide frictionless credit i.e. easy loan. During the one-year pilot project, the central bank focused on Kisan Credit Card (KCC) loans, dairy loans, MSME loans, personal loans and home loans, which are in high demand.
What will be the benefit to consumers?
Even now, many apps claim to provide instant loans. But, RBI’s control over them is very limited. These apps are often accused of arbitrariness and mental harassment. But, if RBI keeps a direct eye on the apps with ULI platform, then there will be less scope for any irregularities. This will make loan evaluation very easy, especially for rural and small consumers.
How will it be easier to get a loan?
The entire process of getting a loan will be easier with the Unified Lending Interface (ULI). It is designed to reduce the time and paperwork taken in credit processing. It combines open architecture with open application programming interface (API). Because of this, financial institutions can easily join the ‘plug and play’ model.
How will the ULI platform work?
The ULI app will collect data from various sources including Aadhaar, e-KYC, state government land records, PAN validation and account aggregators. It will also be linked with services like milk data from dairy cooperatives and house or property search data. Just like you make payment in UPI by just entering the PIN, you will also be able to take a loan by entering the PIN if you are eligible.
Will ULI be as successful as UPI?
Unified Payment Interface (UPI) was launched in April 2016. In its 8-year journey, UPI has changed the world of digital payments. You will see QR code scanners installed from paan shops to vegetable carts. Many other countries have also adopted the UPI model. To repeat the success of UPI, ULI will have to provide the same experience to the user.
