RBI looks to digitize Kisan Credit Card scheme

The Reserve Bank of India (RBI) on Friday said it would take up a pilot project for end-to-end digitization of Kisan Credit Card (KCC) lending, developed by the central bank and its subsidiary Reserve Bank Innovation Hub (RBIH), aiming to speed up the loan turnaround time.

Commencing in September, the project will entail automation of various processes within banks and integration of their systems with the service providers.

The proposed digitization aims to make it more efficient and reduce costs for borrowers.

“This pilot project on digitization of KCC lending is expected to play a pivotal role in facilitating credit flow to the unserved and underserved rural population by making the credit process faster and more efficient. When fully implemented, this has the potential to transform the rural credit delivery system of the country,” RBI said.

The Kisan Credit Card scheme was introduced in 1998 to issue such cards to farmers based on their land holdings for uniform adoption by the banks. While farmers were initially allowed to use them to readily purchase agriculture inputs such as seeds, fertilizers, pesticides, and draw cash for their production needs, the scheme has since been revised.

Rural finance encompasses a range of financial services offered to rural customers, including farmers, at all income levels, RBI said.