NABARD & RBI Developed Innovation Hub to fasten digital Agri lending

Utkarsh Classes Last Updated 27-04-2024

NABARD & RBI Developed Innovation Hub to fasten digital Agri lending

Agreements and MoU 4 min read

The National Bank for Agriculture and Rural Development (NABARD) announced that it has collaborated with the Reserve Bank's subsidiary, RBIH, to establish a system for faster processing of agricultural loans.

NABARD stated that it plans to integrate its e-KCC loan origination system portal with the Public Tech Platform for Frictionless Credit (PTPFC) of Reserve Bank Innovation Hub (RBIH), which is a wholly-owned subsidiary of the RBI.
NABARD has created a digital platform to simplify the process of obtaining Kisan Credit Cards (KCC) for farmers.
This platform will be available to cooperative banks and Regional Rural Banks (RRBs).
By digitizing the process, farmers can receive credit at their doorstep quickly and banks can work more efficiently, fulfilling NABARD's mission of promoting rural prosperity.

Partnership between NABARD and RBIH

The partnership between NABARD and RBIH was signed by their respective chairpersons.
The integration with PTPFC will provide services such as digital state land records, satellite data, KYC, credit history, and transliteration to 351 district and state cooperative banks, and 43 RRBs.
These services will help banks assess creditworthiness more effectively, ultimately reducing loan processing time from three to four weeks to just five minutes.
The collaboration between these organizations will reduce the amount of time farmers spend on the paper-based process, which includes acquiring land records. This is time that could be spent on income-generating activities.
Over ten states have participated in making digital land records available via PTPFC to facilitate the seamless flow of credible information for lenders.
The pilot phase of the partnership will first be implemented in select RRBs, including the Karnataka Gramin Bank and Maharashtra Gramin Bank, and cooperative banks in Andhra Pradesh.
The aim is to expand the digital lending platform to encompass approximately 5 crore KCC loans throughout all cooperative banks and RRBs nationwide.
This initiative will considerably decrease operational expenses for lenders while enhancing credit accessibility, thus promoting a more comprehensive and efficient rural financial system.

NABARD

NABARD is a bank in India that helps farmers and rural communities.
It was created by the government in 1982 to make sure farming and rural development in India is sustainable and fair.
It has helped change the lives of people in rural areas in many ways over the last 40 years.
Some of these ways include providing financial help for farming, building infrastructure, enabling people to borrow small amounts of money to start their own businesses, and encouraging people to work together in groups.
NABARD continues to help rural areas by using new ideas, technology, and developing organizations that support rural communities.
Chairman: Mr. Shaji K V