Banks' role key for success of new crop loan scheme, says RBI

Lenders have an important role in the success of recently launched crop loan scheme Pradhan Mantri Fasal Bima Yojana (PMFBY), the Reserve Bank today said.
"Banks have a vital role to play in increasing the coverage under the scheme," RBI said in a notification addressed to bank chiefs.
It said bank branches in the 45 districts, where the scheme is being piloted, will have to ensure 100 per cent coverage of loanee farmers. The scheme is compulsory for loanee farmers availing Seasonal Agricultural Operational (SAO) Loans or Kisan Credit Card (KCC).
As the scheme is voluntary for non-loanee farmers, banks have to focus on supporting peasants, who have opened account under the Jan Dhan scheme, in getting crop insurance, including guiding them through the entire process, it said.

The RBI also flagged lack of compilation of land details and crop sown details of the loanee farmers availing crop loan by the banks as a key issue. Absence of such details has resulted in non-availability of requisite data on real time basis for monitoring and planning purposes.
The regulator said an integrated IT platform with data, which can be accessed by all financial institutions, can help in providing real time data. It proposed to initiate development of an integrated platform on a pilot basis.
Approved by the Centre in January, PMFBY would replace the existing National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS) from kharif season (summer crops) of 2016.