RBI to launches pilot project to digitize Kisan Credit Card In MP and Tamilnadu

Tags: Economy/Finance State News

The Reserve Bank of India has decided to launch pilot projects to digitize Kisan Credit Cards (KCC) in Madhya Pradesh and Tamil Nadu to transform rural credit delivery systems and to improve the quality of credit delivery in the rural areas.

The Digitisation Project 

• RBI will launch a pilot project for end-to-end digitalisation of Kisan Credit Card (KCC) lending, developed by the Reserve Bank Innovation Hub (RBIH) Bengaluru. 
• The pilot project would entail automation of various processes within banks and integration of their systems with the service providers. 
• The proposed digitalisation of the KCC lending process will make it more efficient, reduce costs for borrowers and reduce Turn Around Time (TAT) from loan application to disbursement significantly.

Where it will be launched 

The pilot project will commence in September 2022 in select districts of Madhya Pradesh and Tamil Nadu with Union Bank of India and Federal Bank, respectively, as partner banks and with active cooperation of the state governments.

Kisan Credit Cards (KCC)

• It was introduced in India by banks in August 1998 to meet the agricultural credit needs of the farmers.
• The model of KCC scheme was prepared by NABARD (National Bank for Agriculture and Rural Development) on the recommendations of RV Gupta Committee.
• RBI set up a High Level Committee on Agricultural Credit through Commercial Banks in 1997. The committee was headed by RV Gupta.