Reserve Bank Innovation Hub to soon start pilot project for digitalization of Kisan Credit Card lending
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. In a statement, 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. It added that the project when implemented fully will have the potential to transform the rural credit delivery system.
