RBI launches public tech platform pilot to offer information to lenders

The Reserve Bank of India (RBI) on Thursday commenced the pilot for a Public Tech Platform for Frictionless Credit. The Platform is being developed by Reserve Bank Innovation Hub (RBIH), a wholly owned subsidiary of the RBI that aims to promote inclusive, access to financial services by leveraging state-of-the art technology.

The initiative aims at optimising the lending process, cutting operational costs, expediting disbursements, and enabling scalability and the pilot phase of the platform will initially prioritise products such as Kisan Credit Card loans, Dairy Loans, collateral-free MSME loans, Personal loans, and Home loans. These services will be offered through partnering banks, creating a diverse offering to cater to various borrowers' needs, RBI said in a statement. 

Already, private sector lender Axis Bank on Thursday said that it has already gone live on RBI’s Public Tech Platform for Frictionless Credit to offer MSME loans and is offering up to Rs 10 lakh unsecured MSME loans and Kisan Credit Card (KCC) for loans up to Rs 1.6 lakh per borrower under the pilot project. It is one of the first banks to partner with RBI on this initiative. 

Axis Bank said that under the pilot programme, both loan products will be provided digitally and will not require any submission of documents by borrowers. The bank will leverage the tech platform by RBI’s Innovation Hub to access secure and consent-based customer data for PAN validation. AADHAR eKYC, Account Aggregator data, verification of land records, and penny drop services to validate bank accounts. Rajiv Anand, Deputy Managing Director, Axis Bank, said, “This platform will bring immense efficiency to the lending process in terms of reduction of costs, quicker disbursement, and scalability.”

The Public Tech Platform is expected to transform credit delivery by streamlining the flow of critical digital information to lenders and is designed upon an open architecture, making use of open Application Programming Interfaces (APIs) and industry standards. "This inclusive framework beckons all participants within the financial sector to seamlessly integrate into a 'plug and play' model, fostering collaborative innovation and efficiency", the RBI said in a statement.

The platform's functionalities will encompass key services, including Aadhaar e-KYC, land records from selected state governments (Madhya Pradesh, Tamil Nadu, Karnataka, Uttar Pradesh, and Maharashtra), satellite data integration, PAN validation, transliteration, Aadhaar e-signing, and account aggregation facilitated by Account Aggregators (AAs), it added.

Earlier this month, RBI has selected technology consulting providers Accenture and McKinsey to use artificial intelligence for its project. These firms have been selected to offer machine learning and advanced analytics for generating supervisory inputs for the apex bank. The tender for the project was first floated in September last year. The total value of the contract is about ₹91 crore, (₹56 crore for McKinsey, and ₹35 crore for Accenture), as per an RBI document, published on 14 August.