The Reserve Bank of India has decided to launch pilot projects in Madhya Pradesh and Tamil Nadu to digitise the Kisan Credit Card (KCC).
Given the challenges of rural finance in India, digitalization of various aspects of rural finance is an important goal of the RBI’s fintech initiatives. In this endeavour, the Reserve Bank Innovation Hub (RBIH) in collaboration with the RBI is undertaking a pilot project for end-to-end digitalisation of Kisan Credit Card (KCC) lending. The pilot project will involve the automation of various processes within banks and integration of their systems with service providers’ systems. The proposed digitalization of the KCC lending process will increase efficiency, lower borrowers’ costs, and significantly reduce TAT.
The pilot will begin in select districts of Madhya Pradesh and Tamil Nadu in September 2022, with Union Bank of India and Federal Bank serving as partner banks and the state governments actively participating. Based on the pilot’s findings, it is planned to expand the digitalization of KCC lending to other districts in these two states, and eventually throughout the country. When fully implemented, this is expected to transform the country’s rural credit delivery system.