NABARD, RBI Innovation Hub Join Hands To Ease Digital Agri Lending

The National Bank for Agriculture and Rural Development (NABARD) has joined hands with the Reserve Bank of India’s wholly-owned subsidiary RBIH to enable faster processing of agricultural loans.

NABARD will integrate its e-KCC loan origination system portal with the Public Tech Platform for Frictionless Credit (PTPFC) of the Reserve Bank Innovation Hub (RBIH), as per a statement.

The collaboration aims to streamline the lending process and reduce the time taken for loan approval from three to four weeks to just five minutes for India’s 120 Mn farmers, it added.

NABARD has built a system called e-KCC portal to help cooperative banks and rural banks give out digital loans called Kisan Credit Cards. 

With RBIH’s integration with PTPFC, about 351 district and state cooperative banks and 43 RRBs will be able to access a range of services like digital state land records, satellite data, KYC, credit history and transliteration for more effective credit underwriting.

This development is aimed at scaling the digital lending platform to cover about 5 Cr KCC loans across all cooperative banks and RRBs nationwide. 

The partnership agreement was signed by Shaji K V, Chairman, NABARD and Rajesh Bansal, CEO, RBIH.

Shaji said, “The digitisation of agricultural lending will ensure instant doorstep delivery of credit to farmers while improving the efficiency of banks, advancing NABARD’s mission of fostering rural prosperity.”

“This partnership is not just about technology integration, it’s about reimagining rural finance and empowering our Indians with quicker, more reliable access to credit. It signifies our commitment to using innovation to deliver frictionless finance for a billion Indians,” Bansal said.

It is pertinent to note that the paper-based loan process takes up substantial amounts of a farmer’s time, especially to acquire land records, that they could spend on income-generating activities.

The pilot phase of this partnership will see implementation in select RRBs including the Karnataka Gramin Bank and Maharashtra Gramin Bank and cooperative banks in Andhra Pradesh. 

The Indian agricultural sector accounts for nearly 16% of the country’s gross domestic product (GDP) and employs nearly 44% of the national workforce. However, the sector is plagued by the use of age-old practices and obsolete technology.

But with the rise of Indian agritech startups and global traction of investors around the category, India can write the next chapter of the country’s farm story.

Just few months ago, agritech startup Fasal has raised Series A funding of INR 100 Cr ($12 Mn) led by TDK Ventures and British International Investment (BII).

The agritech startups have secured more than $2.4 Bn since 2014, as per Inc42’s analysis.