 "CBDC could be used for collection of micro-loans, says RBI official")
The Central Bank Digital Currency (CBDC) could be used for the collection of micro-loans as an innovative tool to streamline the mechanism for collections, a top Reserve Bank of India (RBI) official hinted, citing insufficient innovation on the collection side of lending.
The banking regulator will engage with banks shortly to generate ideas for innovation, said Suvendu Pati, Chief General Manager (CGM), Fintech Department, RBI.
“I don't think we have innovated enough on the collection side. Think about micro-loans where you are going out for collections—can the central bank digital currency (CBDC), which is a substitute for cash, be used as a collection mechanism? I can announce shortly we are going to engage with banks only to generate ideas for innovation,” he said.
The RBI started a pilot for wholesale CBDC in November 2022 and for retail CBDC in December 2022.
The retail pilot for CBDC saw the number of customers grow to 5 million by June 2024 from 1.3 million a year ago, while merchants increased to 0.42 million from 0.3 million, according to RBI’s Currency and Finance report.
India is among 36 countries where the CBDC is currently in the pilot stage.
Also Read
 "The limit of loans under the Pradhan Mantri Mudra Yojana (PMMY) was doubled to Rs 20 lakh recently, inserting a new category—Tarun Plus. Launched 10 years ago, the scheme intended to provide microfinance to small entrepreneurs. However, the number of")
 "dollars")
 "Property, China Property market")
 "The limit of loans under the Pradhan Mantri Mudra Yojana (PMMY) was doubled to Rs 20 lakh recently, inserting a new category—Tarun Plus. Launched 10 years ago, the scheme intended to provide microfinance to small entrepreneurs. However, the number of")
 "Money, Loan, Economy, Capital, Rs, Rupee, Indian Currency")
The Unified Lending Interface (ULI), the RBI’s UPI-like digital public infrastructure in the lending space, has disbursed 7.5 lakh loans worth Rs 38,000 crore so far, Pati added.
According to the RBI’s Trend and Progress report published in December, the platform has facilitated the disbursal of over 6 lakh loans amounting to Rs 27,000 crore. Of this, about 160,000 loans amounting to Rs 14,500 crore were to micro, small, and medium enterprises (MSMEs), data from the report shows.
The report highlights that twelve loan journeys have been introduced on the ULI platform, including kisan credit card, digital cattle, MSME (unsecured), housing, personal, tractor, micro-business, vehicle, digital gold, e-Mudra, pension, and dairy maintenance loans.
ULI is a platform that unlocks financial and non-financial data, making credit underwriting seamless and customer journeys frictionless for a diverse range of borrowers.
The ULI architecture features common and standardised APIs, designed for a “plug-and-play” approach. This ensures digital access to information from diverse sources, reducing the complexity of multiple technical integrations. As a result, borrowers benefit from seamless credit delivery and quicker turnaround times without requiring extensive documentation.
The pilot for ULI (earlier known as the Public Tech Platform for Frictionless Credit) started on August 17, 2023.
So far, as many as 36 lenders, including various state-owned banks, private banks, small finance banks, district central co-operative banks, regional rural banks, and non-banking financial companies (NBFCs), have been on-boarded onto the platform.