The Reserve Bank of India (RBI) on August 14 announced that it is launching a "public tech platform" that will enable the exchange of information and documents required in the credit lending process. "For digital credit delivery, the data required for credit appraisal are available with different entities like Central and State governments, account aggregators, banks, credit information companies, digital identity authorities, etc. However, they are in separate systems, creating hindrances in the frictionless and timely delivery of rule-based lending. [...] The Public Tech Platform would enable the delivery of frictionless credit by facilitating seamless flow of required digital information to lenders," the central bank stated (emphasis ours). The platform will have an "open architecture, open Application Programming Interfaces (APIs) and standards, to which all financial sector players can connect seamlessly in a ‘plug and play’ model," RBI informed, but the details of the same are yet to be specified so we are unclear if the platform will be truly "open" to all or if entities will require some kind of approval from the central bank. Why does this matter: To avail credit, banks, and Non-Banking Financial Companies (NBFCs) require a variety of information and documents from the borrower that is usually in multiple places. Gathering the needed information is cumbersome, takes time, and also adds to the cost for both, the lender and the borrower. Using a tech platform to make this process quicker and easier could benefit lenders and borrowers in terms of time and resources saved. Article…
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