Kisan credit card

KISAN CREDIT CARD(HOBC No. 107/16 Dt 16/04/2013)

(HO CIRCULAR LETTER NO. 2014-15/175 DT. 06/02/2015 )

Presented by, Abinash Kr. Mandilwar

Chief Manager & Faculty Member, BOI Staff Training College, Bhopal

KISAN CREDIT CARD KCC scheme was first introduced

/implemented during the year 1994 It has been modified on

recommendation of a Working Group under the chairmanship of by Shri T M Bhasin, Chairman & Managing, Indian Bank to review the scheme wef May 12 2012.

The revised KCC Scheme is to be Implemented by Commercial Banks, RRBs and cooperatives.

PURPOSEKCC aims to credit support to the farmers for their

cultivation & other needs as indicated below:a. Short term credit requirements for cultivation of

crops including fodder cropsb. Post harvest expensesc. Produce marketing loand. Consumption requirements of farmer house holde. Working capital for Maintenance of farm assets

and allied activitiesf. Investment credit requirement for agriculture &

allied activities, pump sets, sprayers dairy animals etc

Eligibility Farmers – Individuals or Joint

Borrowers.

Tenant Farmers, Oral Lessees and Share Croppers.

SHGs or JLGs of farmers including tenant farmers, share croppers etc.

KISAN CREDIT CARDType of Facility: Revolving Cash Credit to be sanctioned where total credits during 12 month period should be equal or more than the total debits in the accountMargin: Crop Loan:- No separate margin insisted as the margin is in Built while fixing of scale of finance Term Loan:-Up to Rs. 1 lac: NIL, > Rs. 1 lac: 15 -25 % Security: Hypothecation of crops Up to 1.00 lac & up to 3.00 lac( under tie up arrangement)Other case: Mortgage of landROI:As per RBI/HO guidelines conveyed from time to time.

A flexible Limit of Rs. 10,000/- to Rs. 50,000/- as FLEXI KCC based on the land holding & crop grown Should include short term credit requirement as Crop Cultivation, Post Harvest Warehouse Storage, Other Farm Expenses, Consumption Needs Etc.ANDSmall Term Loan Investments as Purchase of Farm Equipments, Mini Dairy, Back Yard Poultry Etc.

Limit to be fixed as per assessment of Branch Manager without relating it to the value of land.

Composite KCC Limit : FOR 5 YEARS

FIXATION OF LIMIT FOR MF

FOR ALL FARMERS OTHER THAN MF Cost of cultivation as per revised scale of finance (Scale

of finance for the crop, as decided by District level Technical Committee) X Extent of area cultivated

Add 10% of the limit towards post harvest/household expenses/consumption needs

Add 20% towards farm maintenance NB:-As per RBI communication Ref No. RPCD:FSD:BC:

71/05.04.02/2013-14 dated 04/12/2013 regarding Interest Subvention and our Circular Letter No. 2014-15/175 Dt. 06/02/2015 , purpose mentioned at Sr. No. (i) & (ii) only has to finance under KCC Scheme. Sr. No. (iii) to (vi) should be finance under Star Tatkal Scheme.

Total crop loan limit for first year.

CREDIT LIMIT

Add 10% of first year limit towards cost escalation/increase in scale of finance-------2

Add 10% of second year limit towards cost escalation/increase in scale of finance-------3

Add 10% of third year limit towards cost escalation/increase in scale of finance-------4

Add 10% of fourth year limit towards cost escalation/increase in scale of finance-------5

LOAN LIMIT FOR NEXT 5 YEARS

Total crop loan limit-------------I

Add Term Loan component-------II

Maximum permissible limit/KCC limit=I+II

LIMIT FIXATION

SHORT TERM CREDITA. Operation through BranchB. Operation through Cheque facilityC. With drawl through ATM/ Debit CardD. Operations through BC and USBsE. Operation through POS at Sugar Mills/ Contract

Farming Companies. Especially in tie up advancesF. Operation through POS available with input

dealers G. Mobile based transfer transactions at agriculture

input dealers and mandies.

DISBURSEMENT

Short tem components from A to E liquidated

in 12 months . No need to bring zero bal. at any point of time.

Term loan component normally repayable with in 9 years in

installments as fixed based on activity/

income generation.

REPAYMENT

OTHER FEATURES Interest subvention for prompt repayment as

advised by GOI/State Govt from time to time. Crop Insurance, Assets Insurance available PAIS ( Personal Accidental Insurance Scheme) on

payment of premium of agreed ratio between bank and farmer

On time documentation for full amount of aggregate limit.

Simple declaration about crops raised/proposed from II year onwards

No bank’s charges as PPC/DOC etc up to Rs. 3.00 lacs card limit.

KCC short term limit cum SB a/c, fetch interest for credit balance at SB interest rate.

Short term crop loan up to Rs. 3,00,000/- at 7% p.a.

Interest Subvention of 2% p.a. will be available to banks on the KCC Scheme. As per RBI communication Ref No. RPCD:FSD:BC:71/05.04.02/2013-14 dated 04/12/2013 and our Circular Letter No. 2014-15/175 Dt. 06/02/2015 for computation of Interest subvention on KCC limit, only following activities are considered.

a) Short term credit requirements for cultivation of cropsb) Post harvest expenses

Additional Interest subvention @3% will be available to the prompt paying farmers from the date of disbursement of crop loan to the actual date of repayment by farmers or up to date fixed by bank for repayment of crop loan whichever is earlier.

Rate of Interst/ Interest Subvention

ILLUSTRATIONMarginal farmer raising single crop in a year Assumptions :

a) Land holding : 1 acres b) Cropping pattern :Paddy-1 acres (scale of

finance plus crop insurance per acre : Rs11000/-)

c) There is no change in cropping pattern for 5 years

Investment /Allied Activities:I. One non descript Milch Animal (Unit cost:

Rs15,000/-)

ILLUSTRATION OF KCC LIMITSSr No

Crop Loan Component Amount

2 Cost of cultivation of 1 acres of Paddy)Add: 10% towards post harvest/household expenses/consumption Add 20% towards farm maintenance Total Crop Loan Limit for 1st year

Rs. 11000/-

Rs. 1100/-

Rs. 2200/-Rs 14300/-

3 Loan Limit for 2nd year Add: 10% of the limit towards cost escalation/increase in scale of finance(10% of 14300/i.e.Rs.1430/- )

Rs. 1430/- +Rs.15730/-

4 Loan Limit for 3rd year Add: 10% of the limit towards cost of escalation/increase in scale of finance (10% of 15730/-i.e.Rs.1573 or 1570/-)

Rs. 1570/-+Rs.17300/-

5 Loan limit for 4th year Add: 10% of the limit towards cost of escalation in scale of finance (10% of 17300/-i.e.Rs.1730/-

Rs. 1730/-+Rs.19030/--

ILLUSTRATION OF KCC LIMITSSR NO Crop Loan Amount

6 Loan Limit for 5th year Add: 10% of the limit towards cost of escalation in scale of finance (10% of 19030/-i.e.Rs.1903 or 1900/-)

Rs1900/-+Rs.19030/- =Rs.20930/-Say Rs.21000/- (A)

ii. Term Loan Component

1st year : cost of 1 Milch animal

Rs. 15000/- (B)

Maximum Permissible limit/KCC Limit A+B

Rs. 36000/-

Note Drawing limit will be reduced every year on repayment schedule of term loan(s) availed and withdrawals will be allowed up to the drawing limit.

Application & documents to be obtained for full limit for 5 years. Of course , Proposal to be prepared for full limit .

ILLUSTRATIONSmall farmer raising multiple crops in a year

Assumptions :a) Land holding : 2 acres b) Cropping pattern Paddy-1 acre (scale of finance plus crop insurance per

acre: Rs11000/-) Sugarcane- 1 acre (scale of finance plus crop insurance per

acre: Rs22000/-c) Investment /Allied Activities:I. Establishment of 1+1 Dairy Unit in 1st year (unit

cost:Rs20000/- per animal)II. Replacement of Pump set in 3rd year (unit Cost:Rs.30000/-



2 Cost of cultivation of 1 acre of Paddy and 1 acre of sugarcane ( 11000+22000)Add: 10% towards post harvest/household expenses/consumption Add 20% towards farm maintenance Total Crop Loan Limit for 1st year

Rs. 33000/-

Rs. 3300/-

Rs. 6600/-Rs 42900/-

3 Loan Limit for 2nd year Add: 10% of the limit towards cost escalation/increase in scale of finance(10% of 42900/i.e.Rs.4300/-

Rs. 4300/- +Rs.47200/-

4 Loan Limit for 3rd year Add: 10% of the limit towards cost of escalation/increase in scale of finance (10% of 47200/-i.e.Rs.4700/-

Rs. 4700/-+Rs.51900/-


Rs. 5200/-+Rs.57100/--


6 Loan Limit for 5th year Add: 10% of the limit towards cost of escalation in scale of finance (10% of 57100/-i.e.Rs.5700/0

Rs. 5700/-Rs.57100/-Rs.62800/-Say Rs.63000/- (A)


1st year : cost of 1+1 Dairy Unit 3rd year : Replacement of Pump set

Rs. 40000/-Rs. 30000/-Rs. 70000/- (B)


Rs. 133000/-



ILLUSTRATIONOther farmer raising multiple crops in a year Assumptions :

a) Land holding : 10 acres b) Cropping pattern Paddy-5 acres (scale of finance plus crop insurance per

acre : Rs11000/-) Followed by groundnut-5 acres (scale of finance plus crop

insurance per acre: Rs10000/-) Sugarcane- 5 acres (scale of finance plus crop insurance

per acre: Rs22000/-c) Investment /Allied Activities:I. Establishment of 2+2 Dairy Unit in 1st year (Unit

cost:Rs100000/-)II. Purchase of Tractor in 1st year (unit Cost:Rs.600000/-)



2 Cost of cultivation of 5 acres of Paddy, 5 acres of groundnut and 5 acres of sugarcane( 55000+50000+110000)Add: 10% towards post harvest/household expenses/consumption Add 20% towards farm maintenance Total Crop Loan Limit for 1st year

Rs. 215000/-

Rs. 21500/-

Rs. 43000/-Rs 279500/-

3 Loan Limit for 2nd year Add: 10% of the limit towards cost escalation/increase in scale of finance(10% of 279500/i.e.Rs.27950/- )

Rs. 27950/- +Rs.307450/-

4 Loan Limit for 3rd year Add: 10% of the limit towards cost of escalation/increase in scale of finance (10% of 307450/-i.e.Rs.30750/-)

Rs. 30750/-+Rs.338200/-


Rs. 33800/-+Rs.372000/--


6 Loan Limit for 5th year Add: 10% of the limit towards cost of escalation in scale of finance (10% of 372000/-i.e.Rs.37200/-)

Rs. 37200/-+Rs.372000/- =Rs.409200/-Say Rs.409000/- (A)


1st year : cost of 2+2 Dairy Unit Purchase of Tractor

Rs. 100000/-Rs. 600000/-Rs. 700000/- (B)


Rs. 1109000/-



For new advancesOther Components (Produce Marketing Loan, Working Capital for allied activities/ farm machineries, consumption limit) to be financed under other schemes as KISAN TATKAL SCHEME.

For existing KCCs Review accounts either by absorbing these other

components against possible increase in Scale of finance OR Delete these limits from existing KCC accounts and

consider financing the same under other agriculture schemes as Kisan Tatkal Loan Scheme etc.

Other Agriculture loan in existing KCC scheme

THANK YOU

Kisan credit card

Economy & Finance