Overview of the Unified Lending Interface (ULI)

1. What did RBI Governor Shaktikanta Das announce at the ‘Global Conference on DPI and Emerging Technologies’ in Bengaluru?
RBI Governor Shaktikanta Das announced the upcoming nationwide launch of the Unified Lending Interface (ULI), which aims to transform the lending landscape similar to how UPI has revolutionized the retail payment system in India.

2. What is the Unified Lending Interface (ULI) ?
The Unified Lending Interface (ULI) is a proposed public tech platform designed to streamline and enhance the efficiency of the credit delivery  process by enabling a seamless, consent-based flow of digital information across various data service providers to lenders.

3. How does ULI aim to transform the lending process ? 
ULI plans to reduce the complexity and time associated with the credit appraisal process, particularly for smaller and rural borrowers, by providing  standardised APIs for a 'plug and play' access to diverse data sources, thus allowing quicker disbursements and less reliance on extensive  documentation.

4. What impact is ULI expected to have on borrowers ?
ULI is expected to provide borrowers, especially in sectors like agriculture and MSMEs, with quicker and more efficient access to credit, reducing the  need for extensive documentation and accelerating the lending process.

5. What is the difference between UPI and ULI ?
UPI, or Unified Payments Interface, facilitates real-time retail payments between bank accounts via a mobile application, while ULI, or Unified  Lending Interface, is focused on streamlining and improving the efficiency of the lending process by integrating various data sources for credit appraisal.

6. How will ULI benefit the financial ecosystem in India ?
By digitizing and centralizing access to financial and non-financial data, ULI will cater to a large unmet demand for credit, particularly benefiting  agricultural and MSME sectors, and potentially reducing the overall cost of credit.

7. What did Shaktikanta Das refer to as the ‘new trinity’ in India’s digital infrastructure ?
Governor Das referred to the combination of JAM (Jan Dhan, Aadhar, and Mobile), UPI, and ULI as the ‘new trinity’ of India’s digital infrastructure, aimed at advancing digital financial inclusion and efficiency.

8. What was the initial purpose of UPI when it was launched in 2016 ?
UPI was launched to facilitate seamless fund transfers and merchant payments through a single mobile application that can access multiple bank accounts, providing a comprehensive banking experience.

9. What are the roles of banks, NBFCs, fintech companies, and startups in the context of ULI ?
These entities are encouraged to create and provide innovative solutions using the digital public infrastructure established by ULI, enhancing their ability to offer effective and efficient credit services.

10. What are the anticipated challenges in implementing ULI ?
Implementing ULI may involve challenges such as integrating diverse data systems, ensuring data security and privacy, and achieving widespread adoption across all financial sectors.

By Ojaank Sir