RBI/2004-05/204
RPCD. PLFS.BC. NO. 38 /05.05.09/2004-05
October 4, 2004
The Chairman and Managing Director
All Scheduled commercial Banks
Dear Sir,
KCC Scheme Revised
Please refer to our circular RPCD.PLFS.BC.NO 20/05.05.09/98-99 dated August
5,1998 advising you to introduce Kisan Credit Card Scheme on the lines of the
Model Scheme prepared by NABARD.
2.The Kisan Credit Card (KCC) Scheme introduced in August 1998, has since stabilised,
with major share of crop loans being routed through it. At the inception of
the Scheme, it was envisaged that in due course of time, investment credit requirements
of farmers viz. allied and non-farm activities may also be covered under the
Scheme. Since these activities are currently outside the ambit of the KCC Scheme,
farmers have to approach the banks separately for their additional requirements
every time, entailing additional time and cost, and observing banks’ procedural
formalities including documentation.
3.Keeping the above in view NABARD has revised the Model KCC Scheme which is
enclosed for your information and necessary action.
4.The progress in this regard may be reported to us, on a monthly basis, in
the format enclosed.
Yours faithfully
(Hauzel Thangzamuan)
General Manager
Annexure
Scheme to cover term loans for agriculture & allied activities
under KCC
1. The Scheme
The Scheme shall be referred to as the 'Scheme to cover
term loans for agriculture and allied activities under Kisan Credit Card Scheme'.
2. Objectives
The Scheme aims at providing adequate and timely credit
for the comprehensive credit requirements of farmers under single window, with
flexible and simplified procedure, adopting whole farm approach, including the
short-term credit needs and a reasonable component for consumption needs, through
Kisan Credit Card.
3. Participating banks
The Scheme will be implemented by all Commercial Banks,
RRBs, State Co-operative Banks/DCCBs/PACS and Scheduled Primary Cooperative
Banks.
4. Nature of financial accommodation
The credit facility extended under the Scheme will be in
the nature of term loan and revolving cash credit for agriculture and allied
activities.
5. Quantum of limit
5.1 The Scheme will cover term credit as also
working capital for agriculture and allied activities, in addition to short
term credit limit presently available for crop/s according to extant instructions.
The banks may fix the quantum of credit for term and working capital limit
for agricultural and allied activities etc., based on the unit cost of the
asset/s proposed to be acquired by the farmer, the allied activities already
being undertaken on the farm, the bank’s judgement on his repayment capacity
vis-a-vis total loan burden devolving on the farmer, including his existing
loan obligations.
5.2 The initial investment in fixed assets and/or
working capital requirement/ recurring expenditure of the borrower may be
taken as the basis for fixing the limit. The working capital/recurring expenditure
limit may be in the form of a revolving cash credit. Banks may, at their discretion,
build in a component of consumption credit, keeping in view the family labour,
while fixing the overall ceiling amount that could be drawn under the Kisan
Credit Card. The total limit would have a relationship with the projected
net earning and the repayment capacity of the borrower.
6. Facilities thru' same card :
It is intended that both term as well as short term/working
capital credit facilities could be provided thru' single Kisan Credit Card.
The passbook currently provided to KCC holders may be divided into three separate
portions for maintaining the records of :-
- short term credit/crop loans,
- working capital credit for activities allied to agriculture, and
- term credit.
Banks, however, may ensure that transaction records of different
loan facilities are kept distinct.
7. Flexibility in use of credit :
The borrowers would be eligible to avail of any or all credit
facilities given under KCC, as per their requirement. Term credit limit provided
under the card may be allowed to be utilized by the card holder for acquiring
one or more assets at his convenience as also need. Similarly, card holder may
also be given flexibility to utilize the term credit limit in one or more instalments
as per asset acquirement plan/phasing of the scheme. Banks may monitor proper
end use of credit.
8. Security/Margin/Rate of Interest/Prudential
Norms :
Security, Margin, Rate of Interest and Prudential Norms will
be applicable as per RBI/NABARD stipulations. Further, banks may ensure :-
- impairment of any loan facility is automatically detected;
- automatic stoppage of withdrawal under different loan facilities even if
any one of the loan facility is impaired; and
- proper system is in place to avoid misuse/mix-up of any one/different facilities
to take advantage in terms of security, margin, rate of interest and applicable
prudential norms.
9. Repayment Period :
Short term credit/crop loans as well as working capital for
agriculture and allied activities would continue to be provided as revolving
cash credit limit, repayable in 12 months. The term loan component will be repayable
within a maximum period of 5 years, depending on the type of activity/investment,
as per existing guidelines.
10. Renewal of working capital limit :
No change is envisaged in the existing guidelines for the crop
loan component. In respect of working capital credit limit for agriculture and
allied activities, Banks, on satisfactory operations on the limit, may enhance
the limit, where necessary, at the time of renewal, keeping in view the increase
in costs and additional activities, if any, undertaken by the borrower. Similarly,
banks may also sanction additional term credit limit to the borrower, at the
time of annual review/renewal of credit limits under the card.
11. Validity Period of KCC :
Coinciding with the introduction of term loan facility under
KCC, the validity of the KC Card may be extended from 3 years as at present
to 5 years.
12. NABARD Refinance
- NABARD refinance for Short Term credit would be made available to cooperative
banks and RRBs covering the working capital component included in KCC.
- NABARD refinance for term loan component would be available to Cooperative
banks, RRBs, Commercial banks and Scheduled Primary Cooperative Banks, as
per the terms and conditions applicable to investment credit window under
Automatic Refinance (ARF) Scheme.
- NABARD refinance would, however, not be available for consumption credit
component.
KCC Scheme - Progress Report for the month of :
Agency :Public Sector/Private Sector Bank :
(A) Crop Loans :
Name of the Bank |
No. of cards issued during the month |
Aggregate credit limit sanctioned (Rs. in lakh) |
Cumulative cards issued since inception |
Aggregate credit limit sanctioned since inception |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
(B) Term Loans :
Name of the Bank |
No. of borrowers issued term loans under KCC during the month |
Amount sanctioned (Rs. in lakh) |
Cumulative No. of borrowers issued term loans under KCC |
Aggregate amount sanctioned (Rs. in lakh) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
Note: Information to be furnished Bank-wise.