24-07-2025
From collateral to clicks: RBI bulletin maps India's digital credit revolution
India's credit ecosystem is undergoing a major transformation, moving away from conventional collateral-based lending towards a more inclusive, data-centric approach powered by
digital public infrastructure
(DPI), according to the
Reserve Bank of India
's (RBI) July Bulletin.
At the heart of the FinTech revolution in India is India's Digital Public Infrastructure (DPI) — a framework that integrates technology, markets, and governance to serve public interest, said the central bank's report.
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The Account Aggregator Framework, another cog in the DPI, Open Credit Enablement Network and the upcoming
Unified Lending Interface
(ULI) are establishing a new credit infrastructure aimed at making lending more streamlined, inclusive, and widely accessible.
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Account Aggregator Framework is a crosssectoral framework for consented financial data sharing. Apart from facilitating credit delivery, this is an initiative towards open finance. It has now come a long way and is growing rapidly with onboarding of financial institutions, since guidelines were first issued in 2016, said the bulletin.
ULI, the latest addition in the Digital Public Infrastructure for credit, is designed to simplify and democratize credit access by offering lenders regulated, seamless access to verified borrower data.
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The convergence of Jan Dhan Accounts, Aadhar and Mobile Phones, popularly known as the JAM trinity,
UPI
and ULI, represents a "significant advancement" in India's digital lending infrastructure.
"One of ULI's standout features is its ability to tap into alternative digital data, enabling access to credit even for those without formal financial histories. Its integration with NABARD's e-KCC portal is expected to extend access to customers of District Central Co-operative and Regional Rural Banks, previously excluded from formal digital channels."
The central bank noted that integration of state-level digitized data, such as land records and cooperative databases into the ULI framework, would provide novel cash flow-based lending solutions.
Going forward, the potential for ULI to also harness data from e-commerce platforms and gig economy apps could open new doors for
credit inclusion
for small sellers, delivery workers, and freelancers, it said.
OCEN that facilitates interactions among lenders, borrowers, and loan service providers, effectively uniting all participants within the credit ecosystem on a common platform to streamline credit delivery, is also poised to be a significant part of the fintech landscape.
It is expected to enable lenders to make more informed credit decisions by utilising alternative data sources, such as cash flow information, the central bank said. Going forward, there is a "promising scope" for deeper integration between OCEN and the Open Network for Digital Commerce (ONDC). Such interoperability could democratise credit access further and open new avenues for MSMEs to participate in digital commerce, fostering broader economic growth on multiple fronts, the bulletin added.
RBI said, fintech players have emerged as powerful enablers, transforming how credit reaches previously unserved and underserved populations.
By leveraging the power of technology, they have significantly lowered the cost and complexity of delivering financial services to the last mile, Reserve Bank's bulletin said. "This has not only improved user experience but also addressed persistent challenges that had kept many outside the formal credit fold."
The central bank said that views expressed in this article are those of the authors and do not represent the views of the Reserve Bank of India.
