ACA-TM-37 (v Nov-10 ) Kisan Credit Card (KCC) and Crop Loaning System Sushrut V. Sardesai DGM / MoF CAB, RBI, Pune

ACA-TM-37 (v 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 (v 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 (v Nov-10 ) Revised KCC Scheme

ACA-TM-37 (v 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 (v 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 (v Nov-10 ) Fixation of Maximum Permissible Limit Short Term Limit at the end of the validity period Term Loan Component

ACA-TM-37 (v 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 (v 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 (v 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 (v 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 (v 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 (v 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 (v Nov-10 ) Security Hypothecation of crops up to card limit of Rs 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 (v 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 (v 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 (v Nov-10 ) Thank You