RBI proposes setting up of web portal for quick Agri Loans
The report of the RBI Internal Working Group to Review Agricultural Credit has recommended the Indian Banks’ Association to introduce a web portal on the lines of PSB Loans in 59 Minutes to allow quicker credit access for the agriculture sector.
The RBI had announced the setting up of committee in February to review the reach of institutional credit, inclusiveness and the loan waivers on state finances and agricultural credit.
PSB Loans in 59 Minutes
The PSB Loans in 59 Minutes portal was launched in November 2018 to provide loans of up to Rs 1 crore to MSMEs in less than an hour.
As of 31 March 2019 more than 50,706 proposals had received in-principle approvals and 27,893 proposals been sanctioned.
Other Recommendations made by the Committee
- Aggressive efforts are needed to improve institutional credit delivery through technology-driven solutions to reduce the extent of financial exclusion of agricultural households.
- Banks are required to explore collaborations with agri-tech companies and start-ups to provide access to credit in an integrated, timely and efficient manner to the farmers.
- States which are having a highly restrictive legal framework must be encouraged to reform it on basis of Model Land Leasing Act proposed by NITI Aayog or the Land Licensed Cultivators’ Act, 2011 of Andhra Pradesh to improve formal lending to tenant farmers.
- A federal institution on the lines of goods and services tax (GST) Council, having participation from both the centre as well as the states must be set up to suggest and implement reforms in the field of agriculture.
- The Union government must push the state governments to complete the digitization process and for updating of land records in a time-bound manner. The State governments, in turn, should give access to banks to digitized land records in order to verify the land title and create charge online.
The report notes that commercial banks contributed the majority share (78-80%) in agricultural and allied credit. The share of all co-operative banks constituted 15-16% and the regional rural banks (RRBs) contributed to the remaining of the agricultural credit.
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