Kisan Credit Card (KCC)
and
Crop Loaning System
Sushrut V. Sardesai
DGM / MoF
CAB, RBI, Pune
ACA-TM-37 (v2.2-20-Nov-10)
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.
ACA-TM-37 (v2.2-20-Nov-10)
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.
ACA-TM-37 (v2.2-20-Nov-10)
Revised KCC Scheme
ACA-TM-37 (v2.2-20-Nov-10)
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
ACA-TM-37 (v2.2-20-Nov-10)
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.
ACA-TM-37 (v2.2-20-Nov-10)
Fixation of Maximum Permissible Limit
• Short Term Limit at the end of the validity period
• Term Loan Component
ACA-TM-37 (v2.2-20-Nov-10)
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.
ACA-TM-37 (v2.2-20-Nov-10)
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
ACA-TM-37 (v2.2-20-Nov-10)
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
ACA-TM-37 (v2.2-20-Nov-10)
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
ACA-TM-37 (v2.2-20-Nov-10)
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.
ACA-TM-37 (v2.2-20-Nov-10)
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.
ACA-TM-37 (v2.2-20-Nov-10)
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
ACA-TM-37 (v2.2-20-Nov-10)
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.
ACA-TM-37 (v2.2-20-Nov-10)
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
ACA-TM-37 (v2.2-20-Nov-10)
Thank You
ACA-TM-37 (v2.2-20-Nov-10)