Introducing the Public Tech Platform: A New Era of Consent-Based Credit Information Sharing
The Central Government, acting upon the recommendations of the Council, has officially announced the integration of the "Public Tech Platform for Frictionless Credit" with the common portal for consent-based information sharing. This initiative marks a significant step towards enhancing the ease of access to credit and financial services through digital means.
Key Highlights
• Notification by the Central Government: The announcement specifies the "Public Tech Platform for Frictionless Credit" as the designated system for sharing information based on user consent through the common portal.
• Definition and Purpose: The "Public Tech Platform for Frictionless Credit" is defined as an enterprise-grade, open architecture IT platform. It was conceptualized by the Reserve Bank of India (RBI) in its "Statement on Developmental and Regulatory Policies" dated August 10, 2023, and has been developed by the Reserve Bank Innovation Hub.
• Aim of the Platform: The platform is designed to facilitate the operations of a vast ecosystem of credit. It aims to ensure digital access to information from various data sources, thereby streamlining the process of credit access.
• Architecture and Framework: The platform is built on a standard and protocol-driven architecture. It features an open and shared Application Programming Interface (API) framework, enabling financial service providers and multiple data service providers to converge seamlessly.
Example
Where a small business owner seeks to apply for a loan to expand their operations. Traditionally, this process would involve gathering financial statements, undergoing credit checks, and possibly facing delays in accessing credit. With the "Public Tech Platform for Frictionless Credit":
1. The business owner consents to share their financial information through the common portal.
2. The platform digitally accesses the business owner's financial data from various sources, such as banks, tax authorities, and other financial institutions, in real-time.
3. Financial service providers on the platform can quickly assess the business owner's creditworthiness and offer tailored loan options based on the digitally accessed information.
This example illustrates how the platform simplifies and accelerates the process of obtaining credit, making it more efficient and less cumbersome for both borrowers and lenders.
The "Public Tech Platform for Frictionless Credit" represents a transformative approach to financial services, leveraging digital technology to facilitate easier access to credit. By enabling consent-based information sharing, the platform promises to make the credit application process more transparent, efficient, and user-friendly for all stakeholders involved.
Notification can be accessed at taxinformation.cbic.gov.in/view-pdf/1010019/ENG/Notifications
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