Nabard partners with RBI Innovation Hub to fast-track digital agri lending

The National Bank for Agriculture and Rural Development (NABARD) has announced a strategic collaboration with the Reserve Bank of India Innovation Hub (RBIH) to enhance and quicken the process of agricultural lending.

The partnership will integrate NABARD's electronic Kisan Credit Card (KCC) loan origination system with RBIH’s Public Tech Platform for Frictionless Credit (PTPFC), revolutionizing loan processing for India's farmers.

Objectives of the digital shift

The integration is designed to transition agricultural lending from traditional, paper-based methods to a digital framework, which will drastically reduce the processing time for loans.

"The digitization 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," stated NABARD chairman Shaji K V. The initiative aims to cut down the loan approval time from several weeks to just five minutes, benefiting around 120 million farmers.

Technology and accessibility

By leveraging the PTPFC, approximately 351 district and state cooperative banks, along with 43 Regional Rural Banks (RRBs), will have access to comprehensive digital services such as state land records, satellite data, KYC, credit history, and transliteration tools. These services are intended to facilitate more effective credit underwriting and streamline the overall lending process.

Rajesh Bansal, CEO of RBIH, emphasized the broader impact, saying, "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."

Implementation and pilot phase

The pilot phase of this digital transformation will be implemented in select RRBs, including the Karnataka Gramin Bank and Maharashtra Gramin Bank, and cooperative banks in Andhra Pradesh. The initial goal is to scale the digital lending platform to accommodate about 5 crore KCC loans across all participating cooperative banks and RRBs nationwide.