Like all good things in life, the KCC will have a new avatar i.e Electronic Kisan Credit Cards
As a Safe ePayments Motivator, my interest is in Para 6 i.e Disbursement and Part II – Delivery Channels – Technical features
New KCC’s must be as per the revised guidelines and at renewals, the new KCC must be issued.
Till co-operative banks move into CBS (Core Banking Solution) platform, paper mode is allowed for such co-operative banks.
Important features of the Disbursement and Delivery Channels mode:
Short term component of the KCC limit has to be in the nature of revolving cash credit facility.
There should be no restriction in number of debits and credits.
However, each installment of the drawable limit drawn in a particular year will have to be repaid within 12 months.
The drawing limit for the current season/year could be allowed to be drawn using any of the following delivery channels.
a. Operations through branch
b. Operations using Cheque facility
c. Withdrawal through ATM / Debit cards
d. Operations through Business Correspondents and ultra thin branches
e. Operation through PoS available in Sugar Mills/ Contract farming companies, etc., especially for tie-up advances
f. Operations through PoS available with input dealers
g. Mobile based transfer transactions at agricultural input dealers and mandies.
Note: (e), (f) & (g) to be introduced as early as possible so as to reduce transaction costs of both the bank as well as the farmer.
The long term loan for investment purposes may be drawn as per installment fixed.
As the CC limit and the term loan limit are two distinct components of the aggregate card limit bearing different rates of interest and repayment periods, until a composite card could be issued with appropriate software to separately account transactions in either sub limits, two separate electronic cards may be issued.
Part II – Delivery Channels – Technical features
1. Issue of cards
The beneficiaries under the scheme will be issued with a Smart card/ Debit card (Biometric smart card compatible for use in the ATMs/Hand held Swipe Machines and capable of storing adequate information on farmers identity, assets, land holdings and credit profile etc).
All KCC holders should be provided with any one or a combination of the following types of cards:
2. Type of Card:
A magnetic stripe card with PIN (Personal Identification Number) with an ISO IIN(hyperlink) (International Standards Organization International Identification Number) to enable access to all banks ATMs and micro ATMs
In cases where the Banks would want to utilize the centralized biometric authentication infrastructure of the UIDAI (Aadhaar authentication), Debit cards with magnetic stripe and PIN with ISO IIN with biometric authentication of UIDAI can be provided.
Debit Cards with magnetic stripe and only biometric authentication can also be provided depending on customer base of the bank. Till such time, UIDAI becomes widespread, if the banks want to get started without inter-operability using their existing centralized bio metric infrastructure, banks may do so.
Banks may choose to issue EMV (Europay, MasterCard and VISA, a global standard for inter-operation of integrated circuit cards) compliant chip cards with magnetic stripe and pin with ISO IIN.
Further, the biometric authentication and smart cards may follow the common open standards prescribed by IDRBT and IBA. This will enable them to transact seamlessly with input dealers as also enable them to have the sales proceeds credited to their accounts when they sell their output at mandies, procurement centers, etc.
All the cooperative banks shall migrate to CBS platform at the earliest so as to implement the technological innovations in KCC as indicated above. Wherever CBS in the bank has not been in place , a pass book or a credit card cum pass book incorporating the name, address, particulars of land holding, borrowing limit, validity period etc. may be issued fir the time being which will serve both as an identity card as well as facilitate recording of the transactions on an ongoing basis. The card, among others, would provide for a photograph of the holder.
3. Delivery Channels:
The following delivery channels shall be put in place to start with so that the Kisan Credit Card is used by the farmers to effectively transact their operations in their KCC account.
1. Withdrawal through ATMs / Micro ATM
2. Withdrawal through BCs using smart cards.
3. PoS machine through input dealers
4. Mobile Banking with IMPS capabilities/ IVR
5. Aadhaar enabled Cards.
4. Mobile Banking/Other Channels:
Provide Mobile banking functionality for KCC Cards/Accounts as well along with Interbank Mobile Payment Service (IMPS of NPCI) capability to allow customers to use this inter-operable IMPS for funds transfer between banks and also to do merchant payment transactions as additional capability for purchases of agricultural inputs.
This mobile banking should ideally be on Unstructured Supplementary Data (USSD) platform for wider and safer acceptance. However, the banks can also offer this on other fully encrypted modes (application based or SMS based) to make use of the recent relaxation on transaction limits. Banks can also offer unencrypted mobile banking subject to RBI regulations on transaction limits.
It is necessary that Mobile based transaction platforms enabling transactions in the KCC use easy to use SMS based solution with authentication thru’ MPIN. Such solutions also need to be enabled on IVR in local language to ensure transparency and security. Such mobile based payment systems should be encouraged by all the banks by creating awareness and by doing proper customer education.
With the existing infrastructure available with banks, all KCC holders should be provided with any one or a combination of the following types of cards:
.. Debit cards (magnetic stripe card with PIN) enabling farmers to operate the limit through all banks ATMs/Micro ATMs
.. Debit Cards with magnetic stripe and biometric authentication.
.. Smart cards for doing transactions through PoS machines held by Business Correspondents, input dealers, traders and Mandies.
.. EMV compliant chip cards with magnetic stripe and pin with ISO IIN.
In addition, the banks having a call centre/Inter active Voice Response (IVR), may provide SMS based mobile banking with a call back facility from bank for mobile PIN (MPIN) verification through IVR, thus making a secured SMS based mobile banking facility available to card holders.