This system will connect Aadhaar, e-KYC, state government land records, PAN database and account aggregators
To enhance and accelerate the loan appraisal process, the Reserve Bank of India (RBI) is soon to introduce Unified Lending Interface (ULI) which is expected to bring a drastic change in lending industry in India. This was stated by the RBI Governor Shaktikanta Das, like how UPI was introduced in the payment side, this is for the lending side.
The ULI platform is an open one with open APIs (Application programming interface) which implies that many financial institutions can integrate into the network in a plug and play fashion. This system will connect Aadhaar, e-KYC, state government land records, PAN database and account aggregators. By combining these various data inputs, ULI will reduce the time taken to conduct loan assessments by an extremely significant degree, particularly for the small and rural borrowers.
It is aimed at simplifying the loan granting for the borrowers, especially those in the rural and small segments. It will also allow the free access of digital information like the land records of various states and also minimize the time taken in credit appraisal. This platform works on the consent basis hence the privacy of data is upheld which is an important factor of consideration since the data being handled is sensitive financial data.
The pilot phase of ULI, which was launched in August 2023, was to include schemes such as Kisan Credit Card loans, Dairy Loans, MSME loans, personal loans and home loans. This has been followed by the successful implementation of this pilot, and the plan is to take the program to the rest of the country in the near future. Das was confident that ULI will bring similar change to India as the JAM (Jan Dhan-Aadhaar-Mobile) and UPI systems did for the digital transformation of India.
The introduction of ULI is anticipated to meet the huge unsatisfied demand for credit across sectors, especially for the agricultural and the MSMEs. Through digitising customers’ access to financial and non-financial information, ULI will help borrowers to receive credit in a more efficient manner with shorter time cycles and less paperwork.
As the country continues to shift towards a more interconnected and technological based financial system, ULI is well positioned to have a significant influence, especially for those who have been excluded from credit. As it has the ability to reduce the loan process and its complications, ULI is all set to revolutionize the lending sector in India in the same way as UPI did for the payment sector.
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 "After UPI, RBI to soon launch ULI; Know what is it and how it will work")
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