Muted response from large lenders hinders ULI scale up, say bankers

Bankers say Unified Lending Interface growth remains muted as large lenders stick to legacy rails and land record digitisation lags

Lack of digitized land records and slower adoption by large lenders are creating hurdles in scaling up of Unified Lending Interface (ULI), senior bank officials said.

 

“ULI is picking up. However, even though smaller banks might be on-board with the ULI, large banks have their own lending rails and have multiple APIs. They are not as much interested in lending through the ULI platform. The interface definitely helps the smaller banks to lend through the platforms,” said a senior-level executive of a private sector bank.

 

In August 2024, ULI was launched by the then RBI governor Shaktikanta Das aimed at transforming the lending landscape in the country. The platform aims to facilitate easy access to authenticated data from various sources through standardised Application Programming Interface (APIs) to which all lenders can connect seamlessly through a ‘plug and play’ model.

 

The platform was launched with an intention to reduce the time taken for appraisal, especially for smaller borrowers in rural areas, and simplifying multiple technical integrations.

 

The pilot for ULI (earlier known as Public Tech Platform for Frictionless Credit) commenced on August 17, 2023. According to RBI’s trend and progress report, as on December 6, 2024, the platform had disbursed over 600,000 loans amounting to ₹27,000 crore, including MSME loans worth ₹14,500 crore. 

 

“All the banks have come on-board the ULI platform. However, volumes in ULI lending are not seeing a sharp increase from the pilot stage. It is at a stagnant level. The main objective is to scale up the lending through the platform. But, there is a limit to how much a smaller bank can lend, bigger banks need is yet to come in a big way on to the platform,” said another executive of a private sector bank. 

 

The platform also unlocks critical financial, non-financial and alternate data for lenders including digitised state land records, milk pouring data from milk federations, satellite data and property search services, to name a few, through a single interface. With a one-time integration with the platform, lenders can leverage information from all these sources, eliminating the need for them to carry out multiple bilateral integrations with each data and service provider. 

 

 “Although banks have come on-board, scaling up of ULI will take time mainly because the land digitization records are still not available and since land comes under the jurisdiction of the state government, it is still pending. It is also taking a lot of time at the village level,” said a senior executive at a state-owned bank.

 

Meanwhile, the government and regulators are putting in efforts to scale up the ULI platform. In a meeting between the Department of Financial Services (DFS) Secretary M Nagaraju and senior RBI officials in June 2025, Nagaraju had urged stakeholders to nominate nodal officers for fast-tracking the integration of government datasets with ULI.