The Reserve Bank of India (RBI) announced a pilot project for end-to-end digitalization of lending via Kisan Credit Cards (KCC) on Friday (September 2).
The KCC scheme, which was launched in 1998, enables farmers to buy agricultural products and services on credit. The central government offers farmers a 2% interest subsidy and a 3% prompt repayment incentive, allowing them to obtain credit at a 4% interest rate. “The Reserve Bank Innovation Hub (RBIH) in collaboration with the RBI is undertaking a pilot project for end-to-end digitalisation of KCC lending,” the central bank said in a statement. The pilot project, in collaboration with Union Bank of India and Federal Bank, will begin later this month in select districts of Madhya Pradesh and Tamil Nadu. After the pilot is completed, the RBI will actively use the ‘learnings’ to gradually scale up the deployment of KCC-based lending across the country.
