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Informist, Monday, Aug 26, 2024

 

--RBI Das:To launch unified lending interface nationwide in due course 

--RBI Das: Unified lending interface to transform lending ecosystem 

--CONTEXT: RBI Governor Das speaking at an event in Bengaluru 

--RBI Das: Digital public infra reduces transaction costs 

--RBI Das: UPI played significant role in digitalisation of payments 

--RBI Das: Will eventually make e-rupee and UPI interoperable 

--RBI Das: UPI has potential to evolve as global remittance channel 

 

MUMBAI – Unified payments interface has the potential to become a global remittance channel, Reserve Bank of India Governor Shaktikanta Das said today at the RBI@90 conference on 'Digital Public Infrastructure and Emerging Technologies' in Bengaluru.

 

"UPI channel has the potential to evolve into a cheaper and quicker alternative to available channels of cross-border remittances," Das said. A beginning could be made with small value personal remittances as this could be implemented quickly, he said. 

 

Das said a country's legacy payment system, like India's UPI, should be interoperable with its central bank digital currency. This could lead to it being interoperable with another country's central bank digital currency, too, he said. "With the emergence of fast payment systems across countries and experimentation around CBDC, new possibilities are opening up to bring in greater efficiency to cross-border payments. Maximum efficiency gains in such initiatives would come from ensuring inter-operability as a key design element," Das said.

 

The governor said that the challenges arising out of countries preferring to design their own systems could be overcome by developing a plug-and-play system that allows replicability while maintaining the sovereignty of respective countries. "India has made some progress in this direction and would be happy to develop a plug and play system for the benefit of the community of nations," Das said. 

 

He also highlighted the challenges and risks of integrating artifical intelligence with a country's financial system. He said that the authenticity of the data being fed to the training models has to be carefully examined and there should also be careful adoption of artifical intelligence in critical decision-making segments such as loan sanctioning.

 

Data privacy, explainability, accountability and transparency should be at the core of models based on artifical intelligence, Das said. He also spoke at length about the importance of digital payment infrastructure. "I would like to highlight the important role that DPI (digital public infrastructure) has played in India’s digitalisation process and its contribution to inclusivity in Indian society and economy," Das said.

 

He highlighted that among the many positives of digital public infrastructure, interoperability and cost-efficieny, by virtue of their economies of scale, were the most significant. "It can be said that DPI has enabled India to achieve, in less than a decade, levels of financial inclusion that would have otherwise taken several decades or more," he said.

 

UNIFIED LENDING INTERFACE

Das said that based on the central bank's experience of the pilot project for technology platform for frictionless credit, a nation-wide launch of the unified lending interface would be done in due course. 

 

"Just like UPI transformed the payments ecosystem, we expect that ULI (unified lending interface) will play a similar role in transforming the lending space in India," Das said. Last year, the RBI launched the pilot of a technology platform which enables frictionless credit. 

 

"From now on, we propose to call it the Unified Lending Interface," he said.

This unified lending interface platform facilitates seamless and consent based flow of digital information, including even land records of various states, from multiple data service providers to lenders, Das said. He explained that the unified lending interface architecture had common and standardised application programming interfaces, designed for a 'plug and play' approach to ensure digital access to information from diverse sources. This would reduce the complexity of multiple technical integrations, and enable borrowers to benefit from seamless delivery of credit, quicker turnaround time without requiring extensive documentation. 

 

Das said that by digitising access to a customer's financial and non-financial data that otherwise resided in disparate silos, unified lending interface is expected to cater to the large unmet demand for credit across various sectors, particularly agricultural and MSME borrowers.  End

 

US$1 = 83.84 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Richard Fargose and Kabir Sharma

Edited by Avishek Dutta

 

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