Many farmers and dairy farmers are unable to obtain a bank loan due to a lack of credit history. However, using a new platform developed by the Reserve Bank Innovation Hub, a borrower can now calculate their ability to repay the loan by accessing information on the milk that dairy farmers sold to Amul or state-accessible land records.

The "frictionless credit" initiative, which is currently available for farm and dairy loans, is being expanded to include education loans (via the Digi Locker), MSMEs (via Udhyam registration and GST and tax records), and even vehicle and personal loans, as tests have shown that a loan can be sanctioned in less than 10 minutes.

Prior to this, an RBI survey revealed that processing farm loans used to take two to four weeks and cost about 6% of the loan's total value.

"It will be the lending equivalent of ONDC." Banks will be able to use data from multiple sources to make lending decisions, according to an RBI official.

The entire process is app-based, and either the borrower or bank employees can use it. Before disbursing the loan, these staff members will use hand-held devices and biometric authentication to verify the borrower's identity and consent. Banks will process farm loans, for example, using digitised bank records, the PAN, voter ID, or other government-issued ID cards.