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Purpose:

Kisan Credit Card Scheme aims at providing adequate and timely credit support from the banking system under a single window to the farmers for their cultivation and other needs as indicated below:
a. To meet the short term credit requirements for cultivation of crops.
b. Post harvest expenses.
c. Produce Marketing loan.
d. Consumption requirements of farmer household.
e. Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery, etc.
f. Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc.

Eligibility:

i. All Farmers – Individuals/ Joint land holder who are owner cultivators.
ii. Tenant Farmers, Oral Lessees & Share Croppers.
iii. SHGs or Joint Liability Groups of Farmers including tenant farmers, share croppers, etc.

Any farmer possessing land can be issued KCC irrespective of any condition whether he/ she is employee of State/ Central Government/Autonomous bodies.

Fixation of Limit:

The credit limit under the Kisan Credit Card should be fixed as under:

1. Marginal, Small & Other farmers:

1.1 The short term limit to be arrived for the first year: For farmers raising single crop in a year:
Scale of finance for the crop plus insurance premium 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 and estimated Term loan for the tenure of Kisan Credit Card, i.e. five years

1.2 Limit for second & subsequent year:
First year limit for crop cultivation purpose arrived at as above plus 10% of the limit towards cost escalation/ increase in scale of finance for every successive year (2nd, 3rd, 4th and 5th year).

1.3 For farmers raising more than one crop in a year, the limit is to be fixed as above depending upon the crops cultivated as per proposed cropping pattern for the first year and an additional 10% of the limit towards cost escalation/ increase in scale of finance for every successive year (2nd, 3rd, 4th and 5th year). It is assumed that the farmer adopts the same cropping pattern for the remaining four years also. In case the cropping pattern adopted by the farmer is changed in the subsequent year, the limit may be reworked.

1.4 Term loans for investments towards land development, minor irrigation, purchase of farm equipments and allied agricultural activities. The quantum of the credit for term and working capital limit for agricultural and allied activities, etc. based on the unit cost of the asset/s proposed to be acquired by the farmer, the allied activities already being undertaken on the farm, the bank’s judgment on repayment capacity vis-à-vis total loan burden devolving on the farmer, including existing loan obligations.

1.5 The long term loan limit is based on the proposed investments during the five year period and the bank’s perception on the repaying capacity of the farmer.

1.6 Maximum Permissible Limit: The short term loan limit arrived for the 5th year plus the estimated long term loan requirement will be the Maximum Permissible Limit (MPL) and treated as the Kisan Credit Card Limit.

1.7 Fixation of Sub-limits for Marginal, Small & other Farmers:
i. 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 and term loans.

ii. Drawing limit for short term cash credit should be fixed based on the cropping pattern and 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 exceeds the notional hike of 10% contemplated while fixing the five year limit, a revised draw able limit should 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 be allowed to be withdrawn based on the nature of investment and repayment schedule drawn as per the economic life of the proposed investments as per the approved schemes of the bank already in vogue. It is to be ensured that at any point of time the total liability should be within the drawing limit of the concerned year.

VALIDITY/ RENEWAL:

i. i. The Kisan Credit Card should be valid for 5 years subject to an annual review/ renewal.
ii. The review/ renewal 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.

SECURITY:

For loans up to Rs.1.00 lacs:
Primary: Hypothecation of crop/assets created out of bank loan, other moveable assets and receivables.
Collateral: Nil

For loans above Rs. 1.00 lacs up to Rs. 3.00 lacs:
Primary: Hypothecation of crop/assets created out of bank loan, other moveable assets and receivables.
Collateral:
Third party guarantee of one or two persons ( at the discretion of sanctioning authority) of sound financial net means, acceptable to the bank and good for loan amount.

For loans above Rs.3.00 lacs:
Primary: Hypothecation of crop/assets created out of bank loan, other moveable assets and receivables
Collateral:
a) Registered mortgage of the land valuing (distressed sale value) equivalent to the loan amount.
b) Third party guarantee of two persons of sound financial net means, acceptable to the bank and good for loan amount.

* Conditions Apply