As the Balance O/s under KCC(Kisan Credit Cards), is on the increase, the basic doubt is whether the Balance O/s under KCC can be included under Direct financing for Agriculture.
RBI vide a notification on 13/10/2011, clarified that clarified that such credit would be treated as direct finance for agriculture under priority sector lending.
The RBI notification no is RBI/2011-12/219,RPCD.CO.Plan.BC. 22 /04.09.01/2011-12 and can be accessed @
What is KCC(Kissan Credit Card)?
Extract from NABARD Site:
The Kisan Credit Card is a pioneering credit delivery innovation for providing adequate and timely credit to farmers under single window, with flexible and simplified procedure, adopting whole farm approach, including the short-term credit, medium term and long term credit needs of the borrowers for agriculture and allied activities and a reasonable component for consumption needs.
Contents of Credit Card
Beneficiaries covered under the Scheme are issued with a credit card and a pass book or a credit card cum pass book incorporating the name, address, particulars of land holding, borrowing limit, validity period, a passport size photograph of holder etc., which may serve both as an identity card and facilitate recording of transactions on an ongoing basis.
Borrower is required to produce the card cum pass book whenever he/she operates the account.
Salient features of the Kisan Credit Card (KCC) Scheme
• Eligible farmers to be provided with a Kisan Credit Card and a pass book or card-cum-pass book.
•Revolving cash credit facility involving any number of drawals and repayments within the limit.
• Limit to be fixed on the basis of operational land holding, cropping pattern and scale of finance.
• Entire production credit needs for full year plus ancillary activities related to crop production to be considered while fixing limit.
• Sub-limits to cover short term, medium term as well as term credit are fixed at the discretion of banks.
• Card valid for 3 to 5 years subject to annual review. As incentive for good performance, credit limits could be enhanced to take care of increase in costs, change in cropping pattern, etc.
• Each drawal to be repaid within a maximum period of 12 months.
• Conversion/reschedulement of loans also permissible in case of damage to crops due to natural calamities.
• Security, margin, rate of interest, etc. as per RBI norms.
• Operations may be through issuing branch (and also PACS in the case of Cooperative Banks) through other designated branches at the discretion of bank.
• Withdrawals through slips/cheques accompanied by card and passbook.
• Crop loans disbursed under KCC Scheme for notified crops are covered under Rashtriya Krishi Bima Yojna (National Crop Insurance Scheme), a crop insurance scheme introduced at the behest of Government of India to protect the interest of the farmer against loss of crop yield caused by natural calamities, pest attacks etc