Reserve Bank Innovation Hub to soon start pilot project for digitalization of Kisan Credit Card lending.

September 3, 2022

The Reserve Bank will soon begin a pilot project for end-to-end digitalization of Kisan Credit Card or KCC lending.
Stating that digitalization of rural finance is an important objective of RBI’s Fintech initiatives, the apex bank has said that the pilot project will commence in select districts of Madhya Pradesh and Tamil Nadu with Union Bank of India and Federal Bank being partner banks respectively.
Developed by the Reserve Bank Innovation Hub, the proposed digitalization of the KCC lending process is expected to make the process more efficient, and reduce costs for borrowers and the Turn Around Time – TAT significantly.
Currently, the customers are required to visit the bank branch in person along with the proof of land ownership and other documents with the Turn Around Time from loan application to disbursement ranging from two to four weeks.
Based on the learnings from the pilot, RBI plans to gradually expand the digitalization of KCC lending across the country.
RBI has said that this pilot project is expected to play a pivotal role in facilitating credit flow to the unserved and underserved rural population.
According to RBI that the project when implemented fully will have the potential to transform the rural credit delivery system.

About Kisan Credit Card:

The scheme wasintroduced in 1998 for providing adequate and timely credit support from the banking system, under a single window with flexible and simplified procedure to the farmers for their cultivation and other needs like purchase of agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs.
The scheme was further extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004.
In the Budget-2018-19, government announced the extension of the facility of Kisan Credit Card (KCC) to fisheries and animal husbandry farmersto help them to meet their working capital needs.