GIC has agreed that the crop loans disbursed for eligible crops under the Crop Insurance Scheme will be covered under the CCIS, now under Rashtriya Krishi Bima Yojna. However, the banks are expected to maintain all back up records relating to compliance with "RKBY" and its seasonality discipline, cut-off date for submitting declarations and end use, etc. as in the case of normal crop loans.

Objectives of the Scheme :

• To provide insurance coverage and financial support to the farmers in the event of failure of crops as a result of natural calamities, pests and diseases.

• To encourage farmers to adopt progressive farming practices, high value inputs and higher technology in agriculture.

• To help stabilise farm incomes, particularly in disaster years. To support and stimulate primarily production of food crops and oilseeds.

Farmers to be covered:
All farmers (both loanee and non-loanee irrespective of their size of holdings) including sharecroppers, tenant farmers growing insurable crops covered.

Sum insured :
The sum insured extends upto the value of threshold yield of the crop, with an option to cover upto 150% of average yield of the crop on payment of extra premium.

Premium subsidy:
50% subsidy in premium allowed to Small and Marginal Farmers, to be shared equally by the Government of India and State Government/Union Territory. Premium subsidy to be phased out over a period of 5 years.

Hon'ble Union Finance Minister in his Budget Speech for the year 2001-02 set the future agenda for the Scheme as under:

" The innovation of KCC is proved to be very successful. Since the year of its introduction in 1998-99, almost 110 lakh KC cards have been issued. I am asking our banks to accelerate this programme and cover all eligible agricultural farmers within the next 3 years .

I am also asking the banks to provide a personal insurance package to the KCC holders as is often done with other credit cards to cover them against accidental death or permanent disability, upto maximum amount of Rs.50,000/ and Rs.25,000/- respectively. The premium burden will be shared by the card issuing institutions."

• Banks, vide our Circular letter No.NB.PCD(KCC)/29/ 2001-02 dated 10 April 2001, requested to draw up an action plan immediately in consultation with our Regional Office concerned, based on their past performance and experience in implementing the scheme, to ensure the coverage of all the eligible agricultural farmers under the KCC Scheme within the next three years i.e. by 31 March 2004.

• Banks to ensure that targets fixed for 2001-02, 2002-03 and 2003-04 include new agricultural farmers likely to become eligible for their KC cards after 31 March 2001 also.

• Targets fixed for issue of KC Cards be disaggregated month-wise and branch/PACS-wise to facilitate close monitoring of progress vis-a-vis target and also advised to RO concerned.

In order to ensure achievement of the targets so fixed, banks requested to follow strategies suggested by NABARD from time to time. Towards this end, banks to launch a campaign approach to accelerate pace of implementation of the Scheme. Following specific steps may be taken by the banks:

• Conduct of Sensitisation/training programmes for the officers of controlling offices of banks, branch managers and field level functionaries as also district level functions for distribution of cards.

• Holding Banker-Farmers' Meets, as part of the Kharif 2001 campaign, in each block to identify the ground level constraints in the smooth implementation of the Scheme and to initiate remedial measures therefor.

• Use of VVV Clubs fora for propagation of the scheme.

• Placement of hoardings/banners etc. at prominent places, such as branch premises, Panchayat buildings, Mandis, etc.

• Use of audio-video media, bringing out KCC literature in local language to create better awareness about KCC Scheme among farmers.

• Issue of plastic/laminated cards to serve as Identity Cards.

• Monitoring of progress in implementation of the Scheme in Board meetings as also through various state/ district and block level fora with the participation of Government functionaries, bankers, farmers etc.

• Designated insurance company will nominate one office at district level to function as nodal office for co-ordinating implementation of personal accident insurance scheme for KCC holders in the district.

• Nominated office of insurance company to issue a Master Insurance Policy to each DCCB/RRB covering all its KCC holders.

• Premium payable Rs.15/- for a one year policy while Rs.45/- for a 3-year policy.

• Insurance coverage available under Policy only from date of receipt of premium at insurance company.

• Banks to ensure to incorporate name of Nominee in Kisan Credit Card-cum-Pass Book.

• Simplified claim settlement procedure evolved under Scheme whereby an Enquiry-cum-Verification Committee comprising Branch Manager of implementing bank, Lead Bank Officer and representative of insurance company to certify nature of accident causing disability/death and recommend settlement of insurance claims.

Scheme covers risk of KCC holders against death or permanent disability resulting from accidents caused by external, violent and visible means, as under:

• Death due to accident (within 12 months of the accident) caused by outward, violent and visible means -- Rs.50,000/-

• Permanent total disability -- Rs.50,000/-

• Loss of two limbs or two eyes or one limb and one eye -- Rs.50,000/-

• Loss of one limb or one eye -- Rs.25,000/-

(cover subject to certain exclusions as per Annexure-A to Master Policy document)

• A Brochure on KCC Scheme highlighting the salient features, advantages and other relevant information about the Scheme was brought out by Head Office and ROs were asked to circulate the brochure to State govt. departments, Commercial Banks, Cooperative Banks, RRBs and other concerned agencies/officers so as to generate wider awareness about the Scheme.

• Floor limit of Rs.5000/- for issue of KC Cards stands withdrawn.

• Studies on KCC Scheme have been entrusted to BIRD and NABARD Staff College to facilitate feed back on the ground level issues/problems so that changes, where necessary, could be considered.

• Studies on the implementation of the Scheme undertaken by NABARD periodically.

• On the lines of instructions of RBI to Commercial Banks, Cooperative Banks and RRBs have been advised that they may, at their discretion, pay interest at a rate based on their perception and other relevant factors on the minimum credit balances in the cash credit accounts under the Kisan Credit Cards of farmers during the period from 10th to the last day of each calendar month.

• NABARD has prepared a Model Scheme for providing financial assistance for publicity campaign activities of Cooperative Banks under KCC Scheme under CDF with a view to speed up the pace of implementation of KCC Scheme.

• Since launching in August 1998, around 2.38 crore Kisan Credit Cards issued upto 31 March 2002 by Cooperative Banks, Regional Rural Banks and Commercial Banks put together.

• Scheme implemented in all States and Union Territories (except Chandigarh, Daman & Diu and Dadra & Nagar Haveli) with all Cooperative Banks, RRBs and Commercial Banks participating.

• Agency-wise/State-wise progress in issue of cards by all banks during 2001-02 and since inception of Scheme.

(*) data for commercial banks upto 31 December 2002.