Federal Bank launches pilot of instant Kisan credit card lending in Tamil Nadu
The Federal Bank on Monday launched a Kisan Credit Card (KCC) instant lending pilot to digitize rural finance in select districts of Tamil Nadu. The Instant KCC was developed by the Reserve Bank Innovation Hub, a subsidiary of the Reserve Bank of India (RBI).
New experience for farmers
The Bundesbank said the digital loan program will offer farmers a new experience in terms of convenience and processing time compared to the traditional method of issuing loans.
The platform will use e-KYC and eSign, Application Programming Interfaces (APIs) developed by the Tamil Nadu E-Governance Agency (TNeGA) and bureaus’ credit history to process loans to farmers in minutes.
Earlier this month, RBI announced the pilot of KCC loans 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 state governments.
Speaking at the launch event, Shyam Srinivasan, MD and CEO of the Federal Bank said, “Under the leadership of RBI and in partnership with the Reserve Bank Innovation Hub and the Tamil Nadu State Government, we are now able to offer solutions that can help meet the lending needs of our Farmers and use technology to pave the way for new opportunities for them. This introduction will accelerate the transition to faster access to credit from the organized banking system and is another critical step in the formalization of our economy.”
He added that there are 50,000 small and medium-sized farmers in Tamil Nadu alone, which the bank can tap under 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 the active involvement of the state government opens up opportunities to bring frictionless credit to our farmers. We look forward to the success of this project and await its nationwide implementation.”
September 19, 2022