Federal Bank on Monday launched a pilot for instant Kisan Credit Card (KCC) lending in its bid to digitalise rural finance in select districts of Tamil Nadu. The instant KCC was developed by the Reserve Bank Innovation Hub, a subsidiary of Reserve Bank of India (RBI).
New experience for farmers
The Federal Bank said the digital loan scheme will offer a new experience to the farmers as compared to the conventional method of lending in terms of convenience and turnaround time.
The platform will use e-KYC and eSign, Application Programming Interface (APIs) developed by the Tamil Nadu E-Governance Agency (TNeGA) and credit history from bureaus to process loans to farmers in a matter of few minutes.
Earlier this month, RBI announced the pilot for KCC lending in Madhya Pradesh and Tamil Nadu in September with Union Bank of India and Federal Bank, respectively, as partner banks and with active cooperation of the State governments.
Speaking at the launch event, Shyam Srinivasan, MD and CEO, Federal Bank, said, “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.”
He added that Tamil Nadu alone has 50 lakh small and medium farmers, which the bank can aim to tap under the KCC lending and then eventually expand the offering to other parts of the country.
Rajesh Bansal, Chief Executive Officer, Reserve Bank Innovation Hub said “The project, now being launched in Tamil Nadu by the 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.”