The will run the pilot projects for complete digitalisation of (KCC) lending from this month in the select districts of Madhya Pradesh and Tamil Nadu. The digitalisation aims to make KCC-based lending more efficient by reducing costs and turn-around time for borrowers, and improving credit flow to the rural population.

RBI in a statement said the pilot is being developed by the Reserve Bank Innovation Hub (RBIH). Union Bank of India is the partner bank in Madhya Pradesh, while Federal Bank is the partner bank in Tamil Nadu. State governments will actively co-operate in running the pilot projects.

The pilot project would entail automation of various processes within banks and integration of their systems with those of the service providers. Based on the learnings from the pilot, the plan is to expand digitalisation of KCC lending to other districts in these two states and gradually across the country, RBI added.

Rural encompasses a range of financial services offered to customers in that sector, at all income levels. In a country like India, rural credit is closely related to inclusive economic growth, as it caters to the requirements of agriculture and allied activities, ancillary industries, small businesses, etc.

At present, the process for getting such requires customers to visit a bank branch in person, along with proof of land ownership and other documents. Sometimes, the customer may have to visit the bank branch multiple times. The turn-around time from loan application to disbursement has also been rather high, ranging from two to four weeks, RBI said.

Source link

By fintax360

We Fintax360 team simplify finances and taxes for millions of Indian businesses and people. We educate them about finances, taxes and improve their relationship with money.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: