For some years now, we are used to instant payment via multiple online platforms and apps. The unified payments interface (UPI) has managed to connect banks across the board to create the most seamless of transactions.
The scenario is, however, still not that simple and easy when we consider taking loans from banks, NBFCs and microfinance players. More so, if the borrower is self-employed, freelancing, new to credit with no prior track record, a small business owner, a farmer etc.
Endless running around for documents and proofs, for attested copies along with originals, make borrowing quite a task for those in the above categories or in the informal sector who otherwise have the potential to avail and repay loans.
Even when the salaried formal sector employees take loans, there are cases where the paperwork is heavy.
To solve this problem, a new unified lending interface (ULI) was conceived by the Reserve Bank of India (RBI) late last year via the Reserve Bank Innovation Hub. It is still in the pilot phase, but is taking off smartly.
Though it is not a platform that a borrower directly has access to, the ULI has considerable advantages from an efficiency and time-reduction perspective in sanctioning of loans by banks and other lenders.
At its core, the ULI will be able to give access to multiple financial and non-financial data points of borrowers to lenders, electronically, in a fraction of the time it actually takes to physically procure, verify and authenticate them.
As of April this year, the ULI has reportedly facilitated 1.4 million loans worth ₹65,000 crore. The loan figure was ₹27,000 crore as of December 2024. It is clear that there is robust traction for accessing the digital infrastructure.
We get into the details of the ULI and how it differs in functions from account aggregators (AAs)—also data providers—and how borrowers can benefit from the platform.
Pulling in smart data
In a way, the ULI is a data marketplace for lenders. It connects providers of data (multiple agencies) with users of data (lenders) in a comprehensive manner.
The ULI can manage the complete loan lifecycle of a borrower from identity verification, loan eligibility, application and disbursement.
It provides more than 100 services and is connected to 56 lenders currently.
As mentioned earlier, the ULI digital infrastructure can provide financial and non-financial data to lenders.
There are 15 different categories of services available. A sample of those are given below.
State land record system: Land ownership data, master data with district ID, survey number by pin, lien marking, display of record of rights (RoR) and the like. Currently, data from nine States are available. But given that as many as 15 States/Union Territories have digitised most of their land records, data from many more places across India could become available.
Authentication and verification services: PAN verification, bank account validation, e-KYC, car registration verification, ITR and 26 AS analyser, bank statement analyser, Aadhaar redact, UAN (universal account number) to employment, voter ID verification and many more such services.
Property search services: Urban encumbrance check, MCA (Ministry of Corporate Affairs) ROC (Registrar of Companies) report, property search report, legal due diligence records, ownership check, asset-based search with CERSAI and the like.
GSTN data: GSTN number and type of taxpayer, GSTR-1 and GSTR-3b data.
Digital document execution: e-stamp, e-sign etc.
The ULI also connects lenders to account aggregators. Now, these AAs usually provide only financial information related to borrowers and have been around for several years now. There are several AAs providing data to lenders on a consent basis.
On the other hand, ULI culls out data from several other sources and sources non-financial data, too, as mentioned earlier. There is only one ULI and its operates across sources of data and users of data based on a consent mechanism. Thus, it has a much broader scope of operation. AAs are a part of the ULI ecosystem.
Apart from the above, ULI can render other services. These include data points from satellite services, farm irrigation reports, business and MSME verification, legal, fraud & risk compliance, ID/document verification and so on.
How borrowers gain
Take the example of a home loan. When a borrower seeks a loan from a bank, the lender insists on several documents.
Salary slips, income tax returns, employment letters, Aadhaar, PAN, other identities such as passport/voter ID etc., bank statements, allotment letter from the builder, buyer agreement, title deeds of the property for the entire chain of ownership, encumbrance certificates, legal opinion and so on are sought by the bank.
If you are self-employed or a small business owner, you could be asked for GST data, company registration details, asset ownership particulars, etc in addition to many of the documents mentioned earlier.
Once you submit all these, the lender would typically take a few days to a few weeks to sanction or reject the loan based on the applicant profile.
Now, with the ULI, since almost all the documents required are available online, the lending decision can be hastened even to the same day or couple of days.
Apart from faster processing and efficiency with very limited physical moving around of documents, there are a couple of other advantages.
For those without a credit score or a borrowing record, accessing credit can be tough. With the ULI, lenders will have access to a very large number of additional data points to assess the credit worthiness of such borrowers apart from the conventional ones.
So, some lenders may be willing to give loans to borrowers who may be rejected by others due to rigid criteria. So, a wider swathe of borrowers would have access to credit.
Also, you can ‘shop around’ for loans if your financial standing is stronger, as some lenders may be willing to offer better rates.
All that borrowers have to do is give their consent for fetching all the data at the time of loan application. The lender who has tied up with the ULI will get all the data.
If all the data is available online, processing cost is reduced dramatically.
The ULI claims to reduce processing costs by 60 per cent for lenders and compress loan processing times from a few weeks to a few minutes.
Note that borrowers themselves cannot log into the ULI as the digital infrastructure is accessible only to lenders.
Lastly, borrowers may have fears about data security while giving consent.
But the ULI clearly specifies that the entire process of data fetching is consent based. No PII (personally identifiable information) is stored in the digital infrastructure, data is encrypted end-to-end, there are complete audit trails for regulatory compliance and consent management is rigorous.
Published on November 1, 2025
