The government is readying a framework to facilitate secure digital credit to small and micro businesses as per the regulations of the Reserve Bank of India (RBI), information technology minister Ashwini Vaishnaw told reporters on the sidelines of the launch of the ‘Digital Payments Utsav’ on Thursday.
The statement from the minister assumes significance on the back of the recent ban on some digital lending apps, which were not used by RBI-regulated non-banking financial companies (NBFCs) and even some with alleged Chinese links. Lately, some of the apps have also been on the government’s radar owing to data privacy concerns and their unlawful code of conduct, like harassment and threatening borrowers in delay in loan amounts.
When asked whether the government is concerned about the functioning of non-regulated entities, Vaishnaw said, “Yes, therefore, we are working on a RBI-regulated framework so that digital credit also becomes secure and reliable like the country’s digital payment system.”
“This year, we will be rolling out digital credit and the NPCI (National Payments Corporation of India) will take a big lead in that. Over a period of next 10 to 12 months, a good construct of digital credit will be created,” Vaishnaw said, adding that with this facility, even small businesses such as street vendors can get associated with banks for easy credit.
In 2021, the finance ministry also launched an account aggregator network framework with eight large banks for easy lending and wealth management, as well as expanding the potential pool of customers for lenders and fintech companies.
The framework was made to make way for open banking in India and empowering customers to digitally access and share their financial data across institutions in a secure and efficient manner.
The government on Thursday also announced the integration of the Unified Payments Interface (UPI) with its national language translation platform Bhashini. Under this integration, users will be able to transact through voice-based AI in 18 languages.
“Mission Bhashini and Digital Payments have come together to make UPI 123 Pay available in local language. This will enable a common person to make payments in her local language interface through voice,” Vaishnaw said.
“We are also now looking at how we now move on to the unconnected areas of India, as well as the UPI becoming a global payment product, for which NPCI had already started partnering with Nepal, Singapore, Bhutan, the UK and the US,” said Alkesh Kumar Sharma, secretary, ministry of electronics and information technology (MeitY).
Currently, products like UPI123 and UPI Lite help facilitate digital payments even for feature-phone users without internet connectivity.