The Reserve Bank of India considering the importance of digitalisation of rural finance in India initiated a pilot project for end-to-end digitalisation of Kisan Credit Card (KCC) lending. This initiative of fintech is developed by the Reserve Bank Innovation Hub (RBIH) in association with the RBI.
The pilot project will commence in September 2022 in select districts of Madhya Pradesh and Tamil Nadu with Union Bank of India and Federal Bank, respectively, as partner banks and with the active cooperation of the state governments. Based on the learnings from the pilot, it is planned to expand the digitalisation of KCC lending to other districts in these two states and gradually across the country.
In the offline lending process of agriculture advances, the borrower must visit the lender’s branch in person and apply for the loan along with proof of land ownership and other documents. Now and then, the customer may be required to visit the bank branch multiple times. The Turn Around Time (TAT) from loan application to disbursement has also been rather high, ranging from two to four weeks.
Rural finance encompasses a range of financial services offered to rural customers, including farmers, at all income levels and delays in sanction and disbursement of the loan, the proposed digitalisation of the KCC lending process will make it more efficient, reduce costs for borrowers and reduce TAT significantly.
“This pilot project on digitalisation of KCC lending is expected to play a pivotal role in facilitating credit flow to the unserved and underserved rural population by making the credit process faster and more efficient. When fully implemented, this is expected to transform the rural credit delivery system of the country”, said RBI.
According to India’s Central Bank, the digitalisation of various aspects of rural finance is an important objective of RBI’s Fintech initiatives. “In a country like India, rural credit is closely related to inclusive economic growth, as it caters to the requirements of agriculture and allied activities, ancillary industries, small businesses, etc,” RBI said.
Related Post:
Accounting is a multifaceted discipline. It caters to the diverse informational needs of stakeholders within…
As the name says ‘computerised accounting’ is the use of computers, software, and hardware to…
The Supreme Court today overruled a 2008 decision by the National Consumer Disputes Redressal Commission…
The Bank’s financial statements are prepared under the historical cost convention, on the accrual basis…
The term "accounting treatment" represents the prescribed manner or method in which an accountant records…
The Basel Committee on Banking Supervision (BCBS) is the primary global standard setter for the…