Mumbai: A panel set up by the Reserve Bank of India (RBI) has suggested that the Indian Banks’ Association (IBA) introduce a web portal on the lines of PSB Loans in 59 Minutes to allow quicker credit access for the agriculture sector.
The Centre launched the portal in November 2018 to provide loans of up to ₹1 crore to MSMEs in less than an hour. According to latest figures, more than 50,706 proposals had received in-principle approvals and 27,893 proposals been sanctioned as of 31 March, 2019.
“IBA should come out with a technology driven portal for the banks to facilitate ease of credit to the farmers for agriculture and allied activities on the lines of PSB Loans In 59 Minutes to micro, small and medium enterprises (MSMEs)," said the report of the Internal Working Group to Review Agricultural Credit, released on Friday.
RBI had announced setting up of this committee in February to review the reach of institutional credit, inclusiveness and the loan waivers on state finances and agricultural credit.
According to the report, aggressive efforts are needed to improve institutional credit delivery through technology-driven solutions to reduce the extent of financial exclusion of agricultural households. Banks, it said, should explore collaborations with agri-tech companies and start-ups to provide access to credit in an integrated, timely and efficient manner to the farmers.
The report suggested that state governments having a highly restrictive legal framework should be encouraged to reform it on basis of Model Land Leasing Act proposed by NITI Aayog or the Land Licensed Cultivators’ Act, 2011 of Andhra Pradesh to improve formal lending to tenant farmers.
“The government should set up a federal institution, on the lines of goods and services tax (GST) Council, having participation from both the centre as well as the states to suggest and implement reforms in the field of agriculture," it said.
It said that the Union government should push state governments to complete the digitization process and updation of land records in a time bound manner. State governments, in turn, should give access to banks to digitized land records in order to verify land title and create charge online.
The report said that commercial banks contributed the majority share (78-80%) in agricultural and allied credit; the share of all co-operative banks constituted 15-16% and the regional rural banks (RRBs) contributed the remaining of the agricultural credit.