The collaboration aims to revolutionize the lending process for India’s 120 million farmers by reducing loan approval times from three to four weeks to just five minutes!
The National Bank for Agriculture and Rural Development (NABARD) has forged a pivotal partnership with the Reserve Bank of India’s subsidiary, RBIH, to revolutionize the processing of agricultural loans, significantly reducing approval times. This collaboration will integrate NABARD’s e-KCC loan origination system portal with the Public Tech Platform for Frictionless Credit (PTPFC) developed by the Reserve Bank Innovation Hub (RBIH), according to an official statement.
The primary objective of this initiative is to streamline the lending process, slashing the approval time from the conventional three to four weeks to an astonishing five minutes, benefiting approximately 120 million farmers across India.
This groundbreaking development targets the scaling of the digital lending platform to encompass around 5 crore KCC loans across all cooperative banks and RRBs nationwide. The partnership was formalized through an agreement signed by Shaji K V, Chairman of NABARD, and Rajesh Bansal, CEO of RBIH.
NABARD has devised the e-KCC portal to facilitate cooperative banks and rural banks in disbursing digital loans via Kisan Credit Cards. Through RBIH’s integration with PTPFC, a network encompassing 351 district and state cooperative banks along with 43 Regional Rural Banks (RRBs) will gain access to a suite of services including digital state land records, satellite data, KYC, credit history, and transliteration to enhance credit underwriting.
Shaji emphasized, “The digitization of agricultural lending will ensure instant doorstep delivery of credit to farmers while enhancing the operational efficiency of banks, aligning with NABARD’s mission of fostering rural prosperity.”
Rajesh Bansal remarked, “This partnership signifies more than just technology integration; it symbolizes our vision of redefining rural finance and empowering Indians with swifter and more reliable access to credit. It underscores our commitment to leveraging innovation to offer seamless financial solutions to a billion Indians”, adds Rajesh Bansal
It is noteworthy that the transition from paper-based loan processes to digital methods will save farmers considerable time, previously spent on tasks like acquiring land records, enabling them to focus more on income-generating activities.
The pilot phase of this transformative partnership will commence with implementation in select RRBs such as the Karnataka Gramin Bank and Maharashtra Gramin Bank, alongside cooperative banks in Andhra Pradesh.
