The Reserve Bank of India (RBI) is set to broaden the reach of its public tech platform, an initiative developed in collaboration with the Reserve Bank Innovation Hub. This move aims to extend frictionless credit delivery to various segments of the population.
In September 2022, the RBI initiated a pilot program for the frictionless delivery of Kisan Credit Card (KCC) loans, offering loans of up to Rs 1.6 lakh. This pilot was conducted in five states, including Tamil Nadu, Madhya Pradesh, Maharashtra, Uttar Pradesh, and Karnataka, and also included dairy loans in Gujarat. During these pilots, loans totaling Rs 100 crore were disbursed for both KCC and dairy loans.
The pilot phase of this platform was officially launched on August 17, 2023. During this phase, the platform is focusing on a range of financial products, including Kisan Credit Cards, dairy loans, collateral-free MSME loans, personal loans, and home loans. Currently, seven banks are participating in this platform.
Depending on the outcomes of the pilot phase, the platform may be expanded to include MSME loans of up to Rs 1 crore, small-value loans, personal loans, and potentially even educational and car loans.
The digital KCC project has received positive feedback thus far. Farmers can now conveniently apply for new KCC loans or renew their existing ones directly from their fields or homes, using smartphones or tablets. This initiative aligns with the KCC scheme launched in 1998, which allows farmers to access credit for agricultural products and services.
Farmers—individual/joint borrowers who are owner cultivators, tenant farmers, oral lessees and share croppers; self-help groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant farmers, share croppers etc can apply for KCC. The borrower should be a minimum of 18 years of age and a maximum of 75 years. In the case of senior citizens, it is compulsory to have a co-borrower who is a legal heir.
Many popular banks in India offer the Kisan Credit Card scheme such as the State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank, and Central Bank of India, among others.
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