Chennai: Aimed at reducing transaction costs and improving efficiency, Pallavan Grama Bank, a Regional Rural Bank has embarked on a pilot study to launch mobile enabled Kisan Credit Card for farmers in Villupuram district.
National Bank for Agriculture and Rural Development (NABARD) has funded Rs 44.66 lakh for this project.
Reserve Bank Deputy Governor K C Chakrabarty, who spoke after conducting a a sentisation workshop for Bankers and farmers on use of the Card, said the focus of this project was to reduce transaction costs as it was identified that farmers pay huge amounts for every transaction made at a bank.
Farmers could now use the mobile phone for transacting various services to purchase fertilisers instead of paying numerous visits to the Bank, he said.
"Taking this (mobile banking) as an opportunity, we are asking farmers to utilise this service. Every farmer must use the technology and come under the banking fold for doing transaction so that costs goes down and there is efficiency in banking system" he told reporters here.
NABARD Chairman Dr Prakash Bakshi Kisan Credit Card was launched 12 years ago, but found poor response.
"One of the reasons was that they were not able to utilise services offered by the Card. In India, over nine crore such Cards were issued last year, of which 5.54 crore are active", he said.
He said the service in Villupuram district would be available initially from Pallavan Grama Bank and would later be extended to other banks.
"First we will try to expand it by bringing in more banks in Villupuram and then (it will be expanded) over Tamil Nadu", he said.
Asserting that the service would largely benefit farmers, Chakrabarty said the cashless transactions would lead to increased efficiency (among bankers).
"We are trying to popularise it. We are trying to do it on a large scale," he said.
Asked when the formal launch of the project would be, he said, "We reasonably feel, in the next five years, we will be able to link every farmer with a bank account."
Bakshi said NABARD has provided a Rs 44.66 lakh grant for the project and that Mumbai based PayMate is the service provider for the project.
PayMate and Pallavan Grama Bank have entered into a revenue sharing agreement for offering this service to farmers, PayMate Founder-Managing Director Ajay Adiseshann said.
"There is no requirement for setting up separate infrastructure for offering this service by banks. We have entered into a revenue sharing agreement with the bank for offering this service," he said.