Kisan Credit Card (KCC) and Crop Loaning System

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Kisan Credit Card (KCC)andCrop Loaning System

• Sushrut V. Sardesai
• DGM / MoF
• CAB, RBI, Pune

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Salient features of the KCC Scheme

• Farmers to be provided with a KCC and a pass book
  or card-cum-pass book.
• Revolving cash credit facility.
• Limit on the basis of operational land holding,
  cropping pattern and scale of finance.
• Limit for entire production credit needs for full
  year plus ancillary activities related to crop
  production.
• Card valid for 3 years subject to annual review.
• Withdrawals through slips/cheques accompanied by
  card and passbook.

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Salient features contd.....

• Each drawal to be repaid within 12 months.
• Conversion/reschedulement of loans in case of
  damage to crops due to natural calamities.
• Security, margin, rate of interest, etc. as per
  RBI norms.
• Operations may be through issuing branch and also
  through other designated branches at the
  discretion of bank.
• KCC loans for notified crops covered under RKBY.

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Revised KCC Scheme
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Objectives/Purpose

• Adequate and timely credit
• Single window for cultivation other needs
• Short term credit for cultivation of crops
• Post harvest expenses
• Produce Marketing loan
• Consumption requirements of farmer household
• Working capital for maintenance of farm assets
• Investment credit for agriculture and allied
  activities

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Eligibility

• All Farmers Individuals / Joint borrowers
• Tenant Farmers, Oral Lessees Share Croppers
• SHGs or Joint Liability Groups of Farmers
  including tenant farmers, share croppers etc.

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Fixation of Maximum Permissible Limit

• Short Term Limit at the end of the validity
  period
• Term Loan Component

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Fixation of ST credit limit(Farmers other than
MF)

• First Year
• Scale of finance x Extent of area cultivated
• 10 of limit towards post-harvest / household
  / consumption requirements
• 20 of limit towards repairs and maintenance
  expenses of farm assets
• crop insurance, PAIS asset insurance.

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ST credit limit contd.(Farmers other than MF)

• Second subsequent years
• Previous year limit plus 10 of increase towards
  cost escalation for every successive year ( 2nd,
  3rd, 4th 5th year)
• In case the cropping pattern adopted by the
  farmer is changed in the subsequent year, the
  limit may be reworked
• In case the revision of scale of finance for any
  year exceeds the notional hike of 10, a revised
  limit may be fixed

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Disbursement

• Short term component of the KCC limit
• Revolving cash credit facility
• Drawals as per convenience of farmer
• No restriction in number of debits and credits
• Term loan component
• Installments withdrawn based on nature of
  investment and repayment schedule drawn as per
  the economic life of the proposed investments

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Marginal Farmers

• A flexible limit of Rs.10,000 to Rs.50,000 (as
  Flexi KCC) based on
• land holding and crops grown
• post harvest warehouse storage related credit
  needs and other farm expenses,
• consumption needs, etc.,
• small term loan investments
• establishing mini dairy/backyard poultry

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Validity Documentation

• Validity period to be decided by the bank.
• Annual review.
• Margin to be decided by the bank.
• One time documentation at the time of first
  availment and simple declaration thereafter.
• Processing fee to be decided by the banks.

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Repayment NPA Classification

• Repayment period as per anticipated harvesting
  and maturity period of the crops.
• Term loan component Normally repayable within a
  period of 5 years depending on the type of
  activity / investment.
• Financing banks at their discretion, may provide
  longer repayment period for term loan.
• Extant prudential norms for income recognition,
  asset-classification and provisioning will apply.

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Security

• Hypothecation of crops up to card limit of Rs.
  1.00 lakh
• With tie-up for recovery Banks may consider
  sanctioning loans on hypothecation of crops upto
  card limit of Rs.3.00 lakh
• Collateral security at the discretion of Bank for
  loan limits above Rs.1.00 lakh in case of non
  tie-up and above Rs.3.00 lakh in case of tie-up
  advances
• Banks to ensure on-line creation of charge on the
  land records in States where facility available

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Other Features

• Interest Subvention/Incentive by GoI and / or
  State Govt.
• Mandatory Crop Insurance and PAIS.
• Farmer to have option to take benefit of Assets
  Insurance Health Insurance (wherever product is
  available).
• facility of all insurance premia paid through
  KCC account.
• KCC Short Term sub-limit cum SB account
• Separate electronic card for ST long term
  sub-limits until both the sub-limits are
  integrated through an electronic card with
  suitable software.

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Delivery Channels

• Through branch
• Using Cheque facility
• Through ATM / Debit cards
• Through BCs and Ultra Small Branches
• Through PoS available in Sugar Mills/ Contract
  farming companies, etc.,
• Through PoS available with input dealers
• Mobile based transfer transactions at
  agricultural input dealers and mandies

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Thank You