Public sector banks should simplify their loan processes as well as disburse farm loans speedily as the government has set a target to double farmers' income by 2022, the Reserve Bank said today.
Acceleration in income generation is significantly dependent on better capital formation in agriculture, RBI said in a notification to State Level Bankers' Committee (SLBC) Convener Banks and Lead Banks.
"Towards this, banks should revisit their documentation for crop loans, simplify them where required and ensure speedy sanctioning and disbursal of loans within specified time limits," RBI said.
RBI has asked them to work closely with Nabard to prepare potential linked plans and annual credit plans towards the goal to increase farm sector income.
They will also be required to keep 'Doubling of Farmer's Income by 2022' as a regular agenda under Lead Bank Scheme in various forums such as SLBC, District Consultative Committee, District Level Review Committee meetings and Block Level Bankers' Committee.
For the purpose of monitoring and reviewing the progress, lead banks may use the benchmarks as may be provided by Nabard, it said.
The Lead Bank Scheme, through its various forums, monitors and reviews banking performance in states/districts/blocks with special reference to annual credit plans, government sponsored programmes, flow of credit to priority sector for enhancing the flow of bank finance, particularly to rural areas.
"The Scheme, which ensures inter-departmental/governmental coordination in financial sector, should therefore be leveraged to further the objective of doubling farmers' income by 2022," RBI added.
In Budget 2016-17, government had announced its target to double farmers' income by 2022 through focus on irrigation with large budgets, provision of quality seeds and nutrients based soil health check up, investment in warehouses and cold chains, value addition through food processing and creation of a national farm market.
(REOPENS DCM 93)
In a separate release, RBI asked banks to ensure that all new card acceptance infrastructure deployed from January 1 onwards are capable of Aadhaar-based biometric authentication.
"With the substantial increase in number of Aadhaar card holders in the country, we reiterate our above mentioned instructions and advise banks to ensure that all new card acceptance infrastructure deployed with effect from January 1, 2017 are enabled for processing payment transactions using Aadhaar-based biometric authentication also," it said.
As per the Unique Identification Authority of India (UIDAI), a total of 105.93 crore Aadhaar IDs have been generated and over 259.25 crore transactions have been authenticated using the unique number.
In November 2013, the RBI had said that banks may take a decision whether they should adopt Aadhaar as additional factor of authentication or move to EMV chip and PIN technology for securing card present payment infrastructure.
Earlier, a RBI constituted working group on securing card present transactions, headed by Gowri Mukherjee, had recommended the evaluation of UIDAI's Aadhaar as an effective alternative for additional factor of authentication for domestic transactions.
