👍👍👍👍👍👍👍RBI showcases frictionless digital loans in minutes to farmers | The Financial Express

https://www.financialexpress.com/industry/banking-finance/rbi-showcases-frictionless-digital-loans-in-minutes-to-farmers/3175084/

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Working on more such tech platforms for digital loans to MSME, personal loans

“The digitalization of processes was substantially reducing operational expenses and opportunity costs, as also decreased the turnaround time for loan processing from more than two-three weeks to a few minutes,” the RBI said.

While deliberations are on at the G20’s Finance Track to find common ground to address global challenges, the Reserve Bank of India is showcasing to delegates how digitized land record data can be used to sanction and disburse loans in a completely paperless manner in minutes without the farmer having to visit the bank branch.

At the RBI’s Innovation Pavilion, the exhibits also provide information about the upcoming digital tech platform, which is being developed to enable frictionless credit to various types of loans including MSME and Personal Loans by making use of various digital data points.

The digital journey includes opening of accounts through e- KYC, accessing digitized land records of state government, credit bureau scores and other necessary information. The document creation and loan disbursement are also integrated and fully automated. Similarly, digital dairy loan leverages the digitized milk pouring data available with milk cooperatives and the loan sanction to disbursement process is end-to-end digitalised.

“The digitalization of processes was substantially reducing operational expenses and opportunity costs, as also decreased the turnaround time for loan processing from more than two-three weeks to a few minutes,” the RBI said.

The pilot of digital KCC is presently being run in select districts of Madhya Pradesh, Tamil Nadu, Maharashtra, Karnataka, and Uttar Pradesh, while the pilot on Digital Dairy is being carried out in Gujarat. The pilots have been operationalized in association with the Reserve Bank Innovation Hub (RBIH), a wholly-owned subsidiary of RBI and banks.

The platforms envisage a ‘plug and play’ model to which all the financial sector players could connect seamlessly obviating the need for multiple bespoke bilateral integrations and is expected to bring paradigm change by ushering in a completely digital credit delivery process.