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RuralLending-21
a
CO: RBD
DT.
21-08-2014
FILE M-2
S- 201
Assessment of crop loan component based on the scale of finance for the crop +
insurance premium x extent of area cultivated + 10% of the limit towards post-harvest
/ household/consumption requirements + 20% of limit towards maintenance
expenses of farm assets.
For crop loans, no separate margin need to be insisted as the margin is in-built in
scale of finance.
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CO: RBD
Operational guidelines of the revised Kisan Credit Card (KCC) scheme including illustrations
on assessment of KCC limit are given in annexure I. Besides, additional guidelines on
documentation and product codes are given in annexure II for guidance of branches.
Action points for various functionaries to implement the scheme are given in annexure III.
All the branches are advised to ensure
ensure 100% coverage of all eligible farmers in their
operational area under the revised KCC Scheme.
Scheme.
Zonal Managers should personally monitor to ensure smooth and time bound implementation
of the revised scheme.
All staff members should be enlightened about the revised scheme with a view to popularize
the same among the farming community and participate in the process of transformation of
rural credit delivery mechanism.
E.SELVASEKARAN
DEPUTY GENERAL MANAGER (RBD/FI)
CO: RBD
1.
Purpose:
a.
b.
c.
d.
e.
f.
Investment credit requirements for agriculture and allied activity like pumpsets,
sprayers, dairy animals etc
Note:
Note The aggregate of components a. to e.
e above will form the short term credit limit portion
and the aggregate of components under f will form the long term credit limit portion.
2.
Eligibility:
a.
b.
c.
3.
Self Help Groups or Joint Liability Groups of Farmers including tenant farmers, share
croppers etc
The credit limit under the Kisan Credit Card may be fixed as under::
3.1.
a.
For farmers
farmers raising single crop in a year
CO: RBD
Short term loan limit arrived for the 5th year plus the estimated Long Term loan requirement
for five years will be the Maximum Permissible Limit (MPL) and treated as the Kisan Credit
Card Limit.
3.1.b.3.
(i)
(ii)
Short term loans and Term loans are governed by different interest rates.
Besides, at present, short term crop loans are covered under Interest Subvention
Scheme/ Prompt Repayment Incentive scheme. Further, repayment schedule and
norms are different for Short term and Term loans. Hence, in order to have
operational and accounting convenience, the card limit is to be bifurcated into
separate sub limits for Short term cash credit limit cum Savings account and Term
loans.
Drawing limit for short term cash credit should be fixed based on the cropping
pattern. The amounts for crop production, repairs and maintenance of farm assets
and consumption may be allowed to be drawn as per the convenience of the farmer.
In case the revision of scale of finance for any year by the district level committee
exceeds the notional hike of 10% contemplated while fixing the five year limit, a
revised drawable limit may be fixed and the farmer be advised about the same. In
case such revisions require the card limit itself to be enhanced (4th or 5th year), the
same may be done and the farmer be so advised. For term loans, installments may
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CO: RBD
Disbursement :
4.1 The short term component of the KCC limit is in the nature of revolving cash credit
facility. There should be no restriction on the number of debits and credits. The drawing limit
for the current season / year could be allowed to be drawn using any of the following delivery
channels:
a.
b.
c.
d.
e.
f.
g.
4.2
The long term loan for investment purposes may be drawn as per installment fixed.
As the CC limit and the term loan limit are two distinct components of the aggregate card limit
bearing different rates of interest and repayment periods, until a composite card could be
issued with appropriate software to separately account transactions in either sub limits, two
separate electronic cards may be issued..
CO: RBD
Validity:
i.
ii.
iii.
The Kisan Credit Card is valid for 5 years subject to an annual review.
The review may result in continuation of the facility, enhancement of the limit or
cancellation of the limit / withdrawal of the facility, depending upon increase in
cropping area / pattern and performance of the borrower.
When extension and/or re-schedulement of the period of repayment on account of
natural calamities affecting the farmer is granted, the period for reckoning the status
of operations as satisfactory or otherwise would get extended together with the
extended amount of limit. When the proposed extension is beyond one crop season,
the aggregate of debits for which extension is granted is to be transferred to a
separate term loan account with stipulation for repayment in installments.
6.
6.1.
However, if Government supported interest subvention is provided for any component of the
limit, the rate of interest is to be fixed accordingly. (Presently interest rate for short term crop
loans/KCC sanctioned to farmers up to Rs 3.00 lakh is 7% as per extant interest subvention
scheme of Government of India).
6.2 For loans above Rs 3.00 lakh is linked to base rate.
6.3 Long term loan limit under KCC is linked to base rate.
For 6.2 & 6.3 Rate of interest is applicable as per CO/RBD circular isuued from time to time.
7.
Margin:
7.1.
For crop loans, no separate margin need be insisted as the Margin is in-built while
fixing the Scales of Finance. For term loan component, it will be in conformity with the
guidelines of RBI/NABARD from time to time.
7.2.
In case of agri advances (both crop and term loans), no margin should be insisted
for loans up to Rs 100000/-. For limits above Rs100000/-, a margin of 15% to 25% to be
insisted, depending upon the purpose and the quantum of the loan.
8.
Security:
8.1.
Security will be applicable as per RBI guidelines prescribed from time to time.
8.2.
CO: RBD
8.3.
In States where banks have the facility of online creation of charge on the land
records, the same shall be ensured.
9.
Repayment period:
9.1
9.2
The term loan component will be repayable depending on the type of activity/
investment as per the existing guidelines applicable for investment credit.
d.
e.
Farmers to be provided with KCC Short Term sub-limit cum SB account so as to
allow credit balance in KCC cum SB accounts to fetch interest at savings bank rate. A
separate folio needs to be maintained for the long term sub-limit until both the sub-limits are
integrated through an electronic card with suitable software.
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CO: RBD
Illustration
Assessment of KCC LIMIT
1. Small Farmer raising Multiple Crops in a year
1. Assumptions:
: Rs.33000
: Rs. 3300
: Rs. 6600
: Rs.42900
: Rs. 4300
:Rs.47200
Rs.47200
CO: RBD
: Rs. 4700
: Rs.51900
Rs.51900
: Rs. 5200
:Rs.57100
Rs.57100
: Rs. 5700
: Rs.62800
Say Rs.63000.(A)
Rs.63000.(A)
: Rs. 40000
: Rs. 30000
: Rs. 70000.(B)
70000.(B)
: Rs.133000/Rs.133000/-
Note:
Drawing Limit will be reduced every year based on repayment schedule of the term loan(s) availed
and withdrawals will be allowed up to the drawing limit.
CO: RBD
1. Assumptions:
2. Land Holding: 10 acres
3. Cropping Pattern:
Paddy- 5 acres (Scale of finance plus crop insurance per acre Rs.11000)
Followed by Groundnut - 5 acres (Scale of finance plus crop insurance per acre
Rs.10000)
Sugarcane - 5 acres (Scale of finance plus crop insurance per acre Rs.22000)
4. Investment/Allied Activities :
(i)
(ii)
2.
: Rs.215000
: Rs. 21500
: Rs. 43000
: Rs279500
: Rs.27950
:Rs.307450
: Rs.30750
:Rs.338200
Rs.338200
10
: Rs.33800
:Rs.372000
CO: RBD
: Rs.37200
:Rs.409200
Say Rs.409000 (A)
: Rs. 100000
: Rs .600000
: Rs.700000.(B)
Rs.700000.(B)
: Rs.1109000/-
Note :
Drawing Limit will be reduced every year based on repayment schedule of the term loan(s) availed
and withdrawals will be allowed
allowed up to the drawing limit.
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CO: RBD
1. Assumptions:
1.
2.
3.
4.
: Rs.11000
: Rs. 1100
: Rs. 2200
: Rs.14300A1
: Rs.15000 B
: Rs.29300
2nd Year :
Crop loan component:
A1 plus 10% of crop loan limit (A1) towards cost escalation/
increase in scale of finance [14300+(10% of 14300= 1430)]
: Rs.15730A2
A2
Rs.15730
: Rs.30730
3rd Year :
Crop loan component:
A2 plus 10% of crop loan limit (A2) towards cost escalation/
increase in scale of finance [15730+(10% of 15730= 1570)]
: Rs.17300..A3
Rs.17300 A3
: Rs.32300
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CO: RBD
: Rs.19030..A4
Rs.19030 A4
: Rs.34030
5th Year :
Crop loan component:
A4 plus 10% of crop loan limit (A4) towards cost escalation/
increase in scale of finance [19030+(10% of 19030= 1900)]
5th Year Composite KCC Limit : A5+B ( 20930+15000)
: Rs.20930..A5
Rs.20930 A5
: Rs.35930
Say Rs.36000
: Rs.36000
Note:
Drawing Limit will be reduced every year based on repayment schedule of the term loan(s)
availed and withdrawals
withdrawals will be allowed up to the drawing limit
All the above costs estimated are illustrative in nature. The recommended scale of finance /
unit costs may be taken into account while finalizing the credit limit.
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CO: RBD
KCC loans for crop production purposes sanctioned to farmers up to Rs.3.00 lakh
will continue to be charged at 7% ROI as per extant Interest subvention scheme for shortterm crop loans of the Govt. of India.
Accounts with short term limit beyond Rs 3.00 lakh and accounts which are not
eligible to be covered under Interest Subvention scheme, if any, are to be opened under any
one of the following product codes depending upon the limit
KCC (50000) BASE RATE (5903 0017)
KCC (200000) BASE RATE (5903 0018)
KCC (500000) BASE RATE (5903 0019)
KCC ABOVE 500000- BASE RATE (5903 0020)
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CO: RBD
15
CO: RBD
To ensure distribution of Kisan ATM cum debit cards to all eligible farmers through wide
publicity.
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