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Federal Bank launches the pilot for Instant KCC developed by the Reserve Bank Innovation Hub

In early September 2022, the Reserve Bank of India (RBI) announced the digitalization of Rural Finance in select districts of Tamil Nadu with Federal Bank as the partner Bank, and with the active cooperation of the State Government. The pilot of this strategic initiative, developed by the Reserve Bank Innovation Hub, under the guidance of RBI, was launched in Chennai earlier today. In a function attended by key dignitaries from the Reserve Bank of India, Reserve Bank Innovation Hub, and Tamil Nadu State Government, the Bank officially launched the pilot for Instant Kisan Credit Card (KCC).

The digital loan scheme, the first of its kind in Agriculture lending, will offer a new experience to the farmers when compared to the conventional method of lending in terms of convenience and turn-around time. The platform has built-in capabilities to enable an end-to-end digital and paperless journey. The platform uses digital capabilities such as eKYC and design, APIs (Application Programming Interfaces) developed by the TN-eGA, and machine learning capabilities. The facility aims at providing small value loans to small & marginal farmers and is designed to facilitate efficient credit flow to unserved and underserved rural populations.

Commenting on the launch, Mr. Rajesh Bansal, Chief Executive Officer, Reserve Bank Innovation Hub (RBIH) said “In India, rural credit is closely linked to economic growth. In this context, we at RBIH have developed a pilot project for the end-to-end digitalization of the Kisan Credit Card (KCC) lending, in association with RBI. This project, now being launched in Tamil Nadu by Federal Bank with active state government participation, opens up possibilities in making frictionless credit accessible to our farmers. We look forward to the success of this project, and await its implementation across the country.”

Mr. Shyam Srinivasan, MD and CEO, Federal Bank, during his address said, “I am delighted that we, under the guidance of RBI and in collaboration with Reserve Bank Innovation Hub and Tamil Nadu State Government are now able to offer solutions that can help meet the credit needs of our farmers and pave way for new opportunities for them with the help of technology. This launch will accelerate the transition towards quicker access to credit from the organized banking system and is one more decisive step in the formalization of our economy.

As more and more land and other asset ownership records get digitized, we are certain that digitally powered solutions will help credit reach the doorsteps of the most deserving segments of our society.

Our constant endeavor to humanize technology is visible in such efforts and it is indeed a privilege for us to reinforce our commitment in improving credit flow into newer and underserved markets. I believe the journey is now well underway and a lot more of such innovations are poised to happen.”

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