Frictionless Credit Facility: RBI is bringing frictionless credit facility, farmers and unorganized sections will benefit
Shaktikanta Das said that such a digital platform is being developed for frictionless credit facilities, whose Application Programming Interface (API) will enable all the institutions of the financial sector to connect without any hindrance like plug and play model. At present, pilot projects are being run in many states to provide loans to dairy entrepreneurs through Kisan Credit Cards and in a frictionless manner.
RBI Governor Shaktikanta Das said on Thursday that a digital public tech platform is being developed for frictionless credit facilities.
This work is being done by Reserve Bank Innovation Hub, a subsidiary of RBI, with the help of which all the information will be provided digitally to the lender and no contact or documents will be required for the loan.
Das said that the frictionless credit system will increase the efficiency of loan processing and disbursement will be much faster along with a reduction in the cost of credit, which will enable loans to be given to more people.
Das said that a digital platform is being developed for frictionless credit facilities, whose application programming interface (API) will enable all the financial sector institutions to connect seamlessly like plug and play model. At present, pilot projects are being run in many states to provide loans to dairy entrepreneurs through Kisan Credit Cards and in a frictionless manner.
These states include Tamil Nadu, Maharashtra, Madhya Pradesh, Karnataka, and Uttar Pradesh. As a pilot, farmers are being given loans up to Rs 1.60 lakh through the Kisan Credit Card. Through the Digital Kisan Credit Card, the financial institution gets to know the land records of the farmers without any survey and also gets information about the crop planted in it.
On the basis of this, farmers are being given loans in their accounts only on the basis of e-KYC and digital signature. The financial institutions are getting the land record data of the farmers with the help of the state government. Similarly, digital dairy loans are being given with the help of data related to dairy cooperatives, which shows how much milk the dairy entrepreneur extracts daily.
Experts believe that with the complete restoration of this facility, it will be much easier for farmers and MSMEs to take loans. The entire process of digital credit will be completed in just two to four minutes.
