Reserve Bank of India Innovation Hub launches pilot project for Rural Finance Digitalisation

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Reserve Bank of India Innovation Hub launches pilot project for Rural Finance Digitalisation

          Kisan Credit Card (KCC) has been chosen as the pilot project under Rural Finance Digitalisation

          This was announced by Reserve Bank of India vide Press Release dt 02 September, 2022.

          The full press release can be read @ https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=54306



 

Partner Banks – Union Bank of India and Federal Bank

 

Partner States – Madhya Pradesh and Tamil Nadu

Go Live Date – September 2022

Union Bank and the State of Madhya Pradesh will work together

Federal Bank and State of Tamil Nadu will work together

 

The pilot will run in selected districts of Madhya Pradesh and Tamil Nadu by Union Bank of India and Federal Bank.

Objectives:

Objective 01) To reduce the number of physical visits of borrowers / prospective borrowers to the Bank premises

Objective 02) To automate the various processes within the various internal departments of Banks. To reduce the time of Banks systems integration with service providers.

Objective 03) To reduce costs for the borrowers.

Objective 04) To reduce the TAT of the initial sanction and subsequent review

 

 

Benefits:

Benefit 01) Based on the feedback received in the pilot stage, the process can be finetuned before rollout for a wider audience

Benefit 02) Rural Finance is vast. Based on this pilot feedback, digitisation of other rural finance areas can be explored

Benefit 03) Opportunity for Union Bank of India and Federal Bank Teams to be part of an innovation project

Benefit 04) Opportunity for similar innovations in other countries. This can be a case study

Benefit 05) Opportunity for techies working in farming to be associated with this pilot project

Benefit 06) Opportunity for Fintech players focussed on rural India to contribute to Rural Finance Digitalisation

Benefit 07) Opportunity to increase the volumes of BBPS (Bharat Bill Payment Services) in Rural India.

Kisan Credit Card (KCC) Introduction:

1998 – Launch year

2004 – Scheme extended to allied and non-farm activities in the year

2012 – Issuance of Electronic Kisan Credit Cards

The Kisan Credit Card (KCC) scheme was introduced in 1998 for issue of Kisan Credit Cards to farmers on the basis of their holdings for uniform adoption by the banks so that farmers may use them to readily purchase 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.

The scheme was further revisited in 2012 by a working Group under the Chairmanship of Shri T. M. Bhasin, CMD, Indian Bank with a view to simplify the scheme and facilitate issue of Electronic Kisan Credit Cards.

 

The scheme provides broad guidelines to banks for operationalizing the KCC scheme. Implementing banks will have the discretion to adopt the same to suit institution/location specific requirements.

 

 

 

 

Additional Reading:

Union Bank of India -  KISAN CREDIT CARD (UNION GREEN CARD) @ https://www.unionbankofindia.co.in/english/rabd-short-products-service.aspx#top-menu-arrow

Union Bank of India KCC Fresh Sanction STP Features @ https://www.unionbankofindia.co.in/english/kcc-fresh-sanction-stp-features1.aspx

 

Federal Kisan Credit Card (FKCC) @ https://www.federalbank.co.in/federal-kisan-credit-card

 

Reserve Bank of India Master Circular - Kisan Credit Card (KCC) Scheme dt July 4, 2018 @ https://www.rbi.org.in/scripts/BS_ViewMasterCirculars.aspx?Id=11325&Mode=0

 

 

 

Hopefully Union Bank of India and Federal Bank will release a detailed Press Release. At the same time looking forward to project updates in the public domain.

 

of Rural Finance in India – Pilot for Kisan Credit Card (KCC) Lending developed by the Reserve Bank Innovation Hub

 

Kisan Credit Card – RBI, RBIH, Union Bank, Federal Bank join hands for complete Digitisation

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Disclaimer: These are my personal views only.  The bottom line is Safe ePayments. Nothing More – Nothing Less

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