The government has approved the GST Network to share data on GST-registered businesses with the Reserve Bank’s ‘Public Tech Platform for Frictionless Credit,’ provided there is consent from the businesses. This move aims to expedite the loan approval process by leveraging shared Goods and Services Tax (GST) information.
The Reserve Bank of India’s subsidiary, Reserve Bank Innovation Hub, has developed the Public Tech Platform for Frictionless Credit to facilitate seamless access to essential information for lenders, thereby streamlining credit disbursal.
According to a notification from the Central Board of Indirect Taxes and Customs (CBIC), the ‘Public Tech Platform for Frictionless Credit’ has been officially recognized as a system for sharing information by the common portal, subject to consent.
The platform’s architecture, designed with standard protocols, allows financial service providers and multiple data service providers to converge digitally, enabling the operation of a large credit ecosystem.
Rajat Mohan, Executive Director at Moore Singhi, highlighted that GSTN, with appropriate consent, can divulge specific details provided in GST registration applications, as well as data from tax returns and invoice preparations. This arrangement ensures transparency and accuracy in credit assessment, reducing processing time and costs.
Access to authenticated monthly sales and purchase data directly from government sources enhances lenders’ ability to assess credit risk effectively, Mohan noted. Going forward, GST filings are expected to play a crucial role in businesses’ credit eligibility and participation in government-sponsored credit programs.
