CHENNAI: Federal Bank has launched the pilot for instant Kisan Credit Card (KCC), which facilitates agriculture loans in minutes. The first-of-its-kind digital facility introduced in Tamil Nadu to facilitate loans through KCC will be gradually extended to all the southern states, where Federal Bank has 75% presence in the country.
On Monday, the facility was launched in Chennai, Krishnagiri and Madurai districts.
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Farmers can avail loans without any collateral with a cap of Rs 1.6 lakh. The turnaround time for sanctioning and crediting the loan in the borrowers’ accounts will take just five minutes.
The platform has built-in capabilities to enable an end-to-end digital and paperless journey. It uses digital capabilities such as eKYC and eSign, Application Programming Interfaces developed by the Tamil Nadu e-Governance agency (TNeGA) and machine learning capabilities. The facility aims at providing small value loans to small and marginal farmers.
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Shyam Srinivasan, MD and CEO, Federal Bank, said the bank looks at facilitating 50 lakh loans through the digital initiative. “The interest rate on the loans will be anywhere between 4% an 9%,” he said. Federal Bank’s agriculture portfolio is 18%.
Reserve Bank of India (RBI) has announced the digitalisation of rural finance in select districts of Tamil Nadu with Federal Bank as the partner bank and with cooperation of the state government.
