In order to transform and accelerate rural credit delivery system, the Reserve Bank of India (RBI) and its subsidiary Reserve Bank Innovation Hub (RBIH) have decided to start pilot projects to digitalize Kisan Credit Card (KCC) in Tamil Nadu and Madhya Pradesh.
The program, which would begin in September, would involve the automation of different bank processes and the linking of those banks' systems with those of the service providers.
With the proposed digitalization, it will be more cost-effective and more efficient for borrowers including farmers.
"By speeding and simplifying the credit application procedure, this pilot project on digitizing KCC lending is expected to play a crucial role in facilitating credit flow to the unserved and underserved rural population. When completely implemented, this might significantly alter the nation's rural loan distribution system,” according to RBI.
In order to provide farmers with such cards based on their land holdings for uniform acceptance by the banks, the Kisan Credit Card (KCC) system was launched in 1998.
The first plan allowed farmers to use them to easily buy agricultural supplies like seeds, fertilizer, and pesticides and draw cash for their production requirements. However, the scheme has since been changed.
Rural finance encompasses a range of financial services offered to rural customers, including farmers, at all income levels, RBI said.
