RBI

How RBI’s UMI is Shaping the Future of Asset Tokenization for NBFCs? 

A new chapter has dawned in India’s financial sector with the Reserve Bank of India (RBI) newly launching the Unified Markets Interface (UMI). This aims to make the financial system more transparent and efficient with global standards. 

UMI will convert physical assets into digital form through asset tokenization and use wholesale central bank digital currency (CBDC) to settle transactions. This will make transactions faster, risk-free, and cost-effective. 

This development is closely linked to the NBFC (Non-Banking Financial Companies) and Account Aggregator (AA) framework. NBFCs and AAs play a key role in lending and wealth management by leveraging customer data and financial information. 

UMI is emerging as a coherent step in the larger vision of strengthening India’s digital finance infrastructure. 

What is Asset Tokenization (UMI)? 

Asset tokenization refers to the conversion of physical assets such as shares, bonds, loans, or other financial instruments into blockchain-based digital tokens. A physical asset is divided into smaller parts and made investable in digital form. 

An investor can buy a large asset in fractional form, thus creating the opportunity for fractional ownership. These tokens are easily tradable across borders and in global markets. 

It has some other major advantages- transaction transparency increases; paperwork and time are not wasted, and the settlement process is completed faster due to the use of smart contracts. 

This is especially important for NBFCs and account aggregators. They will be able to use this technology to bring new types of loan products, investment structures, and customer-centric solutions to the market. 

RBI’s Vision for Unified Markets Interface (UMI) 

At the 2025 Global Fintech Fest, RBI Governor Sanjay Malhotra announced the Unified Markets Interface. He said, “The Reserve Bank has conceptualized a Unified Markets Interface as a new next-generation financial market infrastructure. This interface will have the capability to tokenize financial assets and settlements using wholesale Central Bank Digital Currency (CBDC).” 

UMI is a part of RBI’s larger plan, where the emphasis is on strengthening digital public infrastructure. It will create new opportunities for stakeholders like NBFCs and account aggregators, where data-driven lending, improved risk management, and faster asset settlement will be possible.  

This initiative will make India’s financial markets more inclusive, transparent, and efficient. It will enable them to compete with global standards in the long run. 

How Does UMI Work with Wholesale CBDC? 

One of the foundations of UMI is the wholesale Central Bank Digital Currency (CBDC). It will be used primarily for the settlement of financial transactions. There are multiple levels of intermediaries in transactions, which increase both time and cost. The settlement of tokenized assets will be direct, fast, and secure with the use of CBDC. 

Tokenized transactions reduce risk because problems like fraud or double spending are virtually eliminated. In addition, costs are reduced because processing costs are reduced due to fewer intermediate steps. 

Smart contracts play an important role in this. These are programmed conditional contracts, which automatically complete transactions when certain conditions are met. This reduces the possibility of human errors or delays. 

This is a big opportunity for NBFCs. They will be able to complete transactions efficiently, reduce operational stress, and easily comply with regulations. 

Relevance for NBFCs and Account Aggregators (AA) 

The Account Aggregator (AA) framework has become important for the exchange of financial information. There are two roles here: Financial Information Providers (FIPs), such as banks, NBFCs, insurance companies, or depositories, and Financial Information Users (FIUs), such as regulated fintechs or financial institutions. NBFCs analyze the financial information of the customer and provide loans and other services. 

As per statistics, there are currently 17 account aggregators, 650 FIUs, 150 FIPs, 16 crore accounts, and about 3.66 billion FIU requests in India. RBI is continuously developing to run a large ecosystem effectively. It focuses on simplifying the onboarding process, strengthening consent management, and raising standards in data protection. 

The merger of UMI and AA frameworks will open new horizons for NBFCs. This will enable data-driven lending, faster access to verified financial information, and the creation of new asset classes and liquidity sources through tokenization. This is a game-changer not just for NBFCs but for the entire financial market. 

RBI’s Broad Ecosystem of Digital Advancements 

RBI has launched several other innovations besides UMI, which together are modernizing India’s financial system- 

UPI HELP (AI-based assistant): Making it easier for customers to check transaction status, file complaints, or manage mandates. 

IoT Payments with UPI: Introducing an automated payment system using the Internet of Things (IoT). It will play a key role in future digital transactions. 

Banking Connect (Interoperable Net Banking): Simplifies and unifies the long-standing, complex net banking process, making online transactions more user-friendly. 

UPI Reserve Pay: Making recurring transactions easier by reserving a certain amount from a credit card or pre-approved credit line. 

All these innovations, together with UMI and CBDC, are creating a complete digital financial architecture. NBFCs will be able to leverage this digital stack to increase customer connectivity, speed up services, and improve efficiency. NBFC AA license holders must understand this well. 

Challenges and Considerations Ahead 

Some key challenges may arise in effectively implementing UMI and tokenized asset systems. First, interoperability between the Account Aggregator (AA) framework and the new platforms needs to be ensured. Market efficiency may be hampered without seamless communication between different systems. 

Second, strong data privacy and cybersecurity management are essential to gain user trust. Tokenization cannot succeed without maintaining the security of financial information. 

Third, NBFCs need clear legislative guidance so that they do not face uncertainty while adopting the tokenized asset model. 

Finally, collaboration among industry stakeholders is essential to make this change effective. Joint efforts of regulators, NBFCs, fintechs, and technology companies can accelerate the pace of this transformation. 

Future Outlook and Innovations 

UMI is laying the foundation for a potential digital asset marketplace for India. Through tokenization, NBFCs will be able to expand into new lending products, especially SME financing and data-driven lending. 

This framework will also provide an opportunity to connect with international markets. Global investors will be able to participate in India’s tokenized assets. It will increase capital inflows and make the market more competitive. 

The long-term goal is to establish India as a hub for digital finance innovation. Just as UPI has been a global success story, UMI and CBDC can propel the Indian financial sector to the forefront of world-class digital solutions. This is an opportunity for NBFCs and an essential preparation for the future. 

The Final Words  

UMI and asset tokenization have opened a new horizon in the Indian financial market. This will make transactions faster, more transparent, and safer. NBFCs will benefit as they will be able to offer data-driven lending, create new asset classes, and launch innovative services for their customers. However, NBFC AA licensees must be adapted quickly. Those who prepare in advance will be ahead of the competition. 

If you are an NBFC or want to participate in the Account Aggregator Framework and RBI’s upcoming digital initiatives, Enterslice is here for you. We will help you with licensing, NBFC compliance, and strategy. Join us today and future-proof your financial business. 

Common Questions About RBI’s UMI & Asset Tokenization