Chennai: The Reserve Bank of India (RBI) had announced the digitalization of Rural Finance in select districts of Tamil Nadu with Federal Bank as the partner Bank and with active co-operation of the State Government. .
The pilot of this strategic initiative, developed by the Reserve Bank Innovation Hub (RBIH), under the guidance of RBI, was launched here on Monday in the presence of key dignitaries from RBIH and Tamil Nadu Government, the bank officially launched the pilot for Instant Kisan Credit Card (KCC).
The digital loan scheme, first of its kind in agriculture lending will offer a new experience to the farmers when compared to the conventional method of lending in terms of convenience and turn-around time.
The platform has built-in capabilities to enable an end-to-end digital and paperless journey. The platform uses digital capabilities such as eKYC and eSign, APIs (Application Programming Interfaces) developed by the TN-eGA and machine learning capabilities.
The facility aims at providing small value loans to small and marginal farmers and is designed to facilitate efficient credit flow to unserved and underserved rural population, RBIH CEO Rajesh Bansal told reporters at the launch event.
“In India, rural credit is closely linked to economic growth. In this context, we at RBIH have developed a pilot project for the end-to-end digitalisation of the KCC lending, in association with RBI”, he said.
“This project, being launched in Tamil Nadu by Federal Bank with active state government participation, opens up possibilities in making frictionless credit accessible to our farmers”, he said.
“We look forward to the success of this project, and await its implementation across the country”, he added. Shyam Srinivasan, MD and CEO, Federal Bank, said, “I am delighted that we, under the guidance of RBI and in collaboration with RBIH and the Tamil Nadu are now able to offer solutions that can help meet the credit needs of our farmers and pave way for new opportunities for them with the help of technology.”
“This launch will accelerate the transition towards quicker access to credit from the organised banking system and is one more decisive step in the formalisation of our economy”, he added.
“As more and more land and other asset ownership records get digitised, we are certain that digitally powered solutions will help credit reach the door steps of the most deserving segments of our society”, he said.