Banks must leverage DPI stack to deepen MSME credit access: RBI Governor

Sanjay Malhotra says financial institutions should leverage ULI, Account Aggregator and other digital platforms to build a more inclusive MSME credit ecosystem

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday urged banks and non-banking financial companies (NBFCs) to make greater use of the country’s digital public infrastructure (DPI) stack to expand credit access for micro, small and medium enterprises (MSMEs), saying the aspiration of Viksit Bharat cannot be achieved without adequate financial support for the sector.

 

Addressing MSME entrepreneurs in Kochi ahead of MSME Day, Malhotra said platforms such as the Account Aggregator (AA) framework, Unified Lending Interface (ULI), Trade Receivables Discounting System (TReDS), GST data trails, and Aadhaar-enabled authentication can help build a more inclusive credit ecosystem.

 

He urged lenders to view MSMEs not merely as a regulatory obligation but as long-term business partners whose growth can generate durable financial returns and wider economic benefits. He added that relationship banking, strengthened by digital data, can complement technology-led credit delivery.

 

MSMEs contribute 31 per cent of India’s GDP, account for around 35 per cent of manufacturing output and nearly half of the country’s merchandise exports, while supporting the livelihoods of more than 320 million people.

 

“We believe that a financial system that does not serve its smallest, most numerous participants well, is not truly serving the economy well,” he said.

 

Drawing a parallel with the Unified Payments Interface (UPI), Malhotra said ULI has the potential to fundamentally change how credit is accessed. “If I may draw an analogy that will resonate with many of you: just as UPI transformed how this country moves money — instantly, digitally, and without friction — we believe that Unified Lending Interface has the potential to do the same for how this country accesses credit,” he said.

 

ULI allows lenders to assess borrowers using digitally available information such as GST filings, bank statements, utility records and land records through a single consent-based interface.

 

“For an enterprise with a thin credit history but a genuinely strong business, this is transformative. It allows you to be judged on the true, current state of your business, quickly and with far less friction,” Malhotra said.

 

He also highlighted the growing role of the AA framework, which facilitated lending worth ₹3.5 trillion during FY26 and has the potential to scale up significantly.

 

Malhotra said RBI’s regulatory measures, coupled with government schemes such as MUDRA and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), have contributed to a significant rise in formal credit to the sector.

 

“Credit outstanding by scheduled commercial banks to the MSME sector stood at ₹36.79 trillion as on December 31, 2025, with a healthy CAGR of 15 per cent during the past five financial years,” he said.

 

At the same time, he acknowledged that the credit gap has not been fully bridged. “While considerable progress has been made, I would not stand here and say that we have covered the credit gap. We have not. But I would certainly say that we have made considerable progress in meeting the financing needs of the MSME sector in the last few years,” he said.