TAMIL NADU, 23 September 2022: Federal bank officially launched the pilot for Instant Kisan Credit Card (KCC) in the presence of the Reserve Bank Innovation Hub (RBIH) and the Tamil Nadu state government.
Early in September 2022, the Reserve Bank of India (RBI) announced plans to digitalize rural finance in a few Tamil Nadu districts, with Federal Bank serving as the partner bank and the state government actively participating.
The Reserve Bank Innovation Hub's strategic initiative's pilot programme was unveiled in Chennai.
Digital loan scheme
In terms of convenience and turnaround time, the digital loan programme for agricultural financing will provide farmers with a novel experience when compared to the traditional manner of lending.
The platform is equipped to support a fully digital and paperless experience from beginning to end. The platform makes advantage of digital features including eKYC and eSign, as well as TN-eGA-developed Application Programming Interfaces (APIs) and machine learning (ML) capabilities.
The facility's goal is to offer modest-value loans to marginal and small farmers while also facilitating effective credit flow to rural communities that are underserved and unserved.
Elaborating on the initiative, Rajesh Bansal, Chief Executive Officer, Reserve Bank Innovation Hub (RBIH) said, “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 Kisan Credit Card (KCC) lending, in association with RBI.”
“This project, now being launched in Tamil Nadu by Federal Bank with active state government participation, opens up possibilities in making frictionless credit accessible to our farmers. We look forward to the success of this project, and await its implementation across the country,” Bansal added.
Shyam Srinivasan, MD and CEO, Federal Bank, during his address said, “I am delighted that we, under the guidance of RBI and in collaboration with Reserve Bank Innovation Hub and Tamil Nadu state government 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,” Srinivasan said.
“As more and more land and other asset ownership records get digitised, we are certain that digitally powered solutions will help credit reach the doorsteps of the most deserving segments of our society. Our constant endeavour to humanise technology is visible in such efforts and it is indeed a privilege for us to reinforce our commitment to improving credit flow into newer and underserved markets. I believe the journey is now well underway and a lot more of such innovations are poised to happen,” Srinivasan added.