Personal Website of R.Kannan
|Home||Table of Contents||Feedback||Project Map|
Hon'ble Union Finance Minister announced in his budget speech for 1998-99 that NABARD would formulate a Model scheme for issue of Kisan Credit Cards to farmers, on the basis of their land holdings, for uniform adoption by banks, so that the farmers may use them to readily purchase agricultural inputs such as seeds, fertilisers, pesticides, etc. and also draw cash for their production needs'.
NABARD formulated a Model Kisan Credit Card Scheme in consultation with major banks. Model Scheme circulated by RBI to commercial banks and by NABARD to Cooperative banks and RRBs in August 1998, with instructions to introduce the same in their respective area of operation.
As a pioneering credit delivery innovation, Kisan Credit Card Scheme aims at provision of adequate and timely support from the banking system to the farmers for their cultivation needs including purchase of inputs in a flexible and cost effective manner.
Contents of Credit Card
Advantages to farmers
Benefits of the Scheme to the Banks
- Operational guidelines
SCBs/DCCBs and RRBs were advised operational guidelines governing provision of refinance for their ST(SAO) disbursements under the KCC Scheme vide Circular letter No. NB.PCD(OPR)/662/A137(Spl.)/99-2000 dt.26.05.99 and Circular letter No. NB.PCD(OPR)/662-A/A137(Spl.)/99-2000 dt. 26.05.99 respectively. The same are summarised below:
instructions on computation of Demand, Collection and Balance (DCB) position, maintenance of Non-overdue Cover (NODC), financing of small/marginal farmers, etc, conveyed in circular letter No.NB.PCD(OPR)/5980/A.135/90-91 dated 17 December 1990 addressed to RCS and in circular letter No.NB.PCD(OPR)/1271/ 334/95-96 dated 02 November 1995 addressed to RRBs will also be, mutatis mutandis, applicable for advances made under the KCC Scheme by SCBs/DCCBs and RRBs respectively. although under the KCC Scheme, production credit for SAO, advances for allied activities, non-farm activities and consumption purposes can be covered, only the production credit for SAO is eligible for refinance from NABARD under the ST(SAO) credit limits.
banks required to maintain separate details of sanctions and accounts for operations on credit limits for SAO purposes under the KCC Scheme to facilitate submission of drawal applications for obtaining refinance from NABARD in respect of eligible loans and reporting such loans in the monthly NODC statements for ST(SAO) loans and advances.
short-term loans outstanding for financing ancillary activities relating to crop production such as maintenance of agricultural machinery/implements, electricity charges, etc. under the KCC Scheme also eligible for refinance from NABARD under ST(SAO) credit limits.
Applicable to Cooperatives only
In view of flexibility and discretion provided to the farmers in both drawals and repayments, it has been decided not to insist, for the present, on compliance with the seasonality discipline in respect of KCC accounts for the purpose of allowing drawals on the ST(SAO) credit limits.
Financing of Small Farmers(SF)/Marginal Farmers(MF):
For compliance on financing of SF/MF, maximum outstanding under production credit for SAO reached in KCC accounts of such farmers during the year(April-March) would be reckoned as loans issued to SF/MF. Thus, for compliance in regard to coverage of SF/MF, the aggregate of maximum outstanding in KCC accounts of SF/MF as well as normal cash credit accounts together with the aggregate of crop loans issued to SF/MF under the normal loaning system, worked out as percentage to the maximum outstanding reached under all KCC (including normal Cash Credit) accounts and the total ST(SAO) loans issued during the year (April-March) will be reckoned.
Applicable to Both Cooperatives and RRBs
Computation of Demand, Collection and Balance (DCB) position: Maximum outstandings under ST(SAO) loans in KCC accounts reached during the year (July-June) be treated as demand, and outstandings in unrenewed KCC accounts may be reckoned as overdues. Percentage of overdues to demand calculated accordingly.
Maintenance of Non Overdue Cover(NODC):
Outstanding in KCC accounts against PACS/Branches for financing SAO excluding amount outstanding under unrenewed KCC accounts will be reckoned as NODC for purpose of borrowings from NABARD. Thus, for purpose of working out the aggregate NODC for borrowings from NABARD for SAO, non-overdue short-term agricultural loans outstanding under normal loan accounts plus non-overdue outstanding under normal cash credit accounts and those under KCC Scheme will constitute NODC.