Farmers in the Villupuram district of Tamil Nadu have been provided with a cashless mobile payment system, called the kisan card system. This service helps farmers pay their input providers in particular and was launched by Pallavan Grama bank. According to K.C. Chakrabarthy, Deputy Governor at the Reserve Bank of India, while there's nothing new about mobile banking, this is the first time a mobile banking initiative has been made specifically in the agricultural arena. The system is meant to bring down the cost of making transactions, as well as it's a facility that works 24/7. It can be extended across the country at any time.

Farmers in Tamil Nadu get mobile banking

Farmers in Tamil Nadu get mobile banking

Of course, one of the issues with organizing mobile banking at the rural level is acclimatization by the users themselves. Farmers have to get used to a mobile banking system. Furthermore, not all Regional Rural Banks (RRBs) have a mobile banking system, so one thing the Reserve Bank will have to do is implement mobile banking on a larger scale.

According to the Chairman at the National Bank for Agriculture and Rural Development (NABARD), this kisan card system was conceived because a lot of agriculturists used to draw their loans as lump sums, which meant higher interests even if the loan was not completely used. This process also involved multiple trips to the bank, which meant that all the benefits of providing subsidized loans to farmers were lost. With the new system, farmers can place orders over the phone and transfer purchase prices from their mobiles instantly. Multiple transactions can also be carried out. The project was made possible by a Rs. 44.66 lakh grant from NABARD.

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