Kisan Credit Card Scheme as per RBI latest guidelines. Complete scheme norms and loan limit assessment for bankers and farmers. Important for JAIIB / CAIIB exam and Bank PO exam (Banking Awareness). Please like and share the video and subscribe my channel for more banking awareness video. For details you may study my book on JAIIB.

1. किसान क्रे डिट िािड स्िीम िी पूर्ड जानिारी
और ऋर् सीमा (Loan Limit) िा ननर्ाडरर्
Banking
Awareness
JAIIB / CAIIB
Exam
गााँव बढ़े तो देश बढ़े

2. INTRODUCTION
KCC scheme was first introduced during
the year 1998 for farmers on the basis of
their holdings by the banks for purchase
of agriculture inputs such as seeds,
fertilizers, pesticides etc. and draw cash
for their production needs. .
The scheme was further extended for the
investment credit requirement of farmers
viz. allied and non-farm activities in the
year 2004.

3. IMPLEMENTATION OF KCC
It has been modified on recommendation of a
Working Group under the chairmanship of by Shri T.
M. Bhasin, Chairman & Managing, Indian Bank to
review the scheme in 2012.
In the Budget 2018-19 the Union Government had
announced their decision to extend the facilities of
Kisan Credit Card (KCC) to Animal Husbandry
farmers and Fisheries (AH & F) to help them meet
their working capital requirements.
The revised KCC Scheme is to be Implemented by
Commercial Banks, RRBs and cooperatives.

4. KCC aims to credit support to the farmers for their cultivation & other
needs as indicated below:
a. Short term credit requirements for cultivation of crops including fodder
crops;
b. Post harvest expenses;
c. Produce marketing loan;
d. Consumption requirements of farmer house hold;
e. Working capital for Maintenance of farm assets and allied activities;
f. Investment credit requirement for agriculture & allied activities, pump
sets, sprayers, dairy, animals husbandry etc.
Note: The aggregate of components ‘a’ to ‘e’ above will form the short
term credit limit portion and the aggregate of components under ‘f’ will
form the long term credit limit portion.

5. ELIGIBILITY
Farmers – Individuals or Joint Borrowers.
Tenant Farmers, Oral Lessees and Share
Croppers.
SHGs or JLGs of farmers including tenant
farmers, share croppers etc.

6. SCHEME NORMS
Type of Facility:
a) Cash Credit: Revolving Cash Credit to be sanctioned where total credits during 12
months period should be equal or more than the total debits in the account.
b) Term Loan: Term loan for investment credit.
Margin:
a) Crop Loan:- No separate margin insisted as the margin is in-built while fixing of
scale of finance.
b) Term Loan:-Up to Rs. 1.60 lakh: NIL, Above Rs. 1.60 lakh: 15 -25 %.
Security: Only Primary security for limit up to Rs. 1.60 lakh in general & under tie
up arrangement up to Rs. 3.00 lakh.
a) Primary: Hypothecation of standing crops.
b) Collateral: Mortgage of agricultural land or on-line charge creation.

7. RATE OF INTEREST &
INTEREST SUBVENTION
Short term crop loan up to Rs. 3,00,000/- at 7% p.a.
 Interest Subvention of 2% p.a. will be available to banks on the KCC
Scheme. As per RBI communication Ref No. RPCD:FSD:BC:71/
05.04.02/2013-14 dated 04/12/2013 for computation of Interest
subvention on KCC limit, only following activities are considered.
a)Short term credit requirements for cultivation of crops,
b)Post harvest expenses.
Additional Interest subvention @3% will be available to the prompt
paying farmers from the date of disbursement of crop loan to the actual
date of repayment by farmers or up to date fixed by bank for repayment
of crop loan whichever is earlier.

8. A flexible Limit of Rs. 10,000/- to Rs. 50,000/- as FLEXI KCC
based on the land holding & crop grown Should include short
term credit requirement as Crop Cultivation, Post Harvest
Warehouse Storage, Other Farm Expenses, Consumption
Needs Etc. and,
Small Term Loan Investments as Purchase of Farm
Equipments, Mini Dairy, Back Yard Poultry Etc.
Limit to be fixed as per assessment of Branch Manager
without relating it to the value of land.
Composite KCC Limit : FOR 5 YEARS
FIXATION OF KCC LIMIT FOR MARGINAL FARMER

9. Cost of cultivation as per revised scale of finance
(Scale of finance for the crop, as decided by District
level Technical Committee) X Extent of area
cultivated.
Add 10% of the limit towards post
harvest/household expenses/consumption needs.
Add 20% towards farm maintenance.
Total crop loan limit for first year.
ASSESSMENT OF KCC LIMIT
FOR FARMERS

10. Add 10% of first year limit towards cost escalation/increase in scale of
finance-------2
Add 10% of second year limit towards cost escalation/increase in scale
of finance-------3
Add 10% of third year limit towards cost escalation/increase in scale
of finance-------4
Add 10% of fourth year limit towards cost escalation/increase in scale
of finance-------5
LOAN LIMIT FOR NEXT 5 YEARS

11. •Total crop loan limit-------------I
•Add Term Loan component-------II
•Maximum permissible limit/KCC limit = I+II
MAXIMUM PERMISSIBLE LIMIT UNDER KCC

12. ILLUSTRATION
(Marginal farmer raising single crop in a year)
Assumptions :
Land holding : 1 acres
Cropping pattern : Paddy -1 acres (Scale of finance plus crop
insurance per acre Rs. 11,000/-)
There is no change in cropping pattern for 5 years
Investment /Allied Activities:
One non descript Milch Animal (Unit cost: Rs. 15,000/-)

13. ILLUSTRATION OF KCC LIMITS
Year Crop Loan Component Amount
1 Cost of cultivation of 1 acres of Paddy
Add: 10% towards post harvest/household expenses/consumption
Add 20% towards farm maintenance
Total Crop Loan Limit for 1st year
Rs. 11000/-
Rs. 1100/-
Rs. 2200/-
Rs 14300/-
2 Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in scale of
finance (10% of 14300/i.e.Rs. 1430/- )
Rs. 1430/- +
Rs. 15730/-
3 Loan Limit for 3rd year
Add: 10% of the limit towards cost of escalation/increase in scale of
finance (10% of 15730/-i.e.Rs. 1573 or Rs. 1570/-)
Rs. 1570/-+
Rs. 17300/-
4 Loan limit for 4th year
Add: 10% of the limit towards cost of escalation in scale of finance
(10% of 17300/-i.e.Rs. 1730/-
Rs. 1730/-+
Rs. 19030/--

14. ILLUSTRATION OF KCC LIMITS
Year Crop Loan Amount
5 Loan Limit for 5th year
Add: 10% of the limit towards cost of
escalation in scale of finance (10% of
19030/-i.e.Rs. 1903 or Rs. 1900/-)
Rs. 1900/-+
Rs. 19030/- =
Rs. 20930/-
Say Rs.21000/- (A)
ii. Term Loan
Component
1st year : cost of 1 Milch animal Rs. 15000/- (B)
Maximum Permissible limit / KCC Limit A+B = Rs. 36000/-
Note Drawing limit will be reduced every year
on repayment schedule of term loan(s)
availed and withdrawals will be allowed
up to the drawing limit.
Application & documents to
be obtained for full limit for 5
years. Of course , Proposal to
be prepared for full limit .

15. ILLUSTRATION
(Farmer raising multiple crops in a year)
Assumptions :
a) Land holding : 2 acres
b) Cropping pattern
 Paddy-1 acre (scale of finance plus crop insurance per acre: Rs. 11000/-)
 Sugarcane- 1 acre (scale of finance plus crop insurance per acre: Rs.
22000/-)
c) Investment /Allied Activities:
I. Establishment of 1+1 Dairy Unit in 1st year (unit cost: Rs. 20000/- per
animal).
II. Replacement of Pump set in 3rd year (unit Cost: Rs. 30000/-).

16. ILLUSTRATION OF KCC LIMITS
Year Crop Loan Component Amount
1 Cost of cultivation of 1 acre of Paddy and 1 acre of sugarcane ( 11000 + 22000)
Add: 10% towards post harvest/household expenses/consumption
Add 20% towards farm maintenance
Total Crop Loan Limit for 1st year.
Rs. 33000/-
Rs. 3300/-
Rs. 6600/-
Rs. 42900/-
2 Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in scale of finance(10%
of Rs. 42900/- i.e. Rs. 4300/-)
Rs. 4300/- +
Rs. 47200/-
3 Loan Limit for 3rd year
Add: 10% of the limit towards cost of escalation/increase in scale of finance
(10% of Rs. 47200/- i.e. Rs. 4700/-)
Rs. 4700/-+
Rs. 51900/-
4 Loan limit for 4th year Add: 10% of the limit towards cost of escalation in scale
of finance (10% of Rs. 51900/- i.e. Rs. 5200/-)
Rs. 5200/-+
Rs. 57100/--

17. ILLUSTRATION OF KCC LIMITS
SR NO Crop Loan Amount
5 Loan Limit for 5th year
Add: 10% of the limit towards cost of escalation in
scale of finance (10% of 57100/-i.e.Rs.5700/-)
Rs. 5700/-
Rs. 57100/-
Rs. 62800/-
Say Rs.63000/- (A)
ii. Term Loan
Component
1st year : cost of 1+1 Dairy Unit
3rd year : Replacement of Pump set
Rs. 40000/-
Rs. 30000/-
Rs. 70000/- (B)
Maximum Permissible limit/KCC Limit A+B = Rs. 133000/-
Note Drawing limit will be reduced every year on
repayment schedule of term loan(s) availed and
withdrawals will be allowed up to the drawing
limit.
Application & documents to
be obtained for full limit for 5
years. Of course , Proposal
to be prepared for full limit .

18. ILLUSTRATION
(Other farmer raising multiple crops in a year)
Assumptions :
a) Land holding : 10 acres
b) Cropping pattern:
 Paddy-5 acres (scale of finance plus crop insurance per acre: Rs. 11000/-)
 Followed by groundnut-5 acres (scale of finance plus crop insurance per
acre: Rs. 10,000/-)
 Sugarcane- 5 acres (scale of finance plus crop insurance per acre:
Rs. 22,000/-)
c) Investment /Allied Activities:
I. Establishment of 2+2 Dairy Unit in 1st year (Unit cost: Rs. 100,000/-)
II. Purchase of Tractor in 1st year (unit Cost: Rs. 600,000/-)

19. ILLUSTRATION OF KCC LIMITS
Year Crop Loan Component Amount
1 Cost of cultivation of 5 acres of Paddy, 5 acres of groundnut and 5 acres of
sugarcane( 55000 + 50000 + 110000)
Add: 10% towards post harvest/household expenses/consumption
Add 20% towards farm maintenance
Total Crop Loan Limit for 1st year
Rs. 215000/-
Rs. 21500/-
Rs. 43000/-
Rs. 279500/-
2 Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10% of Rs. 279500/- i.e. Rs.27950/- )
Rs. 27950/- +
Rs. 307450/-
3 Loan Limit for 3rd year
Add: 10% of the limit towards cost of escalation/increase in scale of finance
(10% of Rs. 307450/- i.e. Rs.30750/-)
Rs. 30750/-+
Rs. 338200/-
4 Loan limit for 4th year
Add: 10% of the limit towards cost of escalation in scale of finance (10% of
Rs. 338200/- i.e. Rs.33800/-)
Rs. 33800/-+
Rs. 372000/--

20. ILLUSTRATION OF KCC LIMITS
Year Crop Loan Amount
5 Loan Limit for 5th year
Add: 10% of the limit towards cost of
escalation in scale of finance (10% of
372000/-i.e.Rs.37200/-)
Rs. 37200/-+
Rs. 372000/- =
Rs. 409200/-
Say Rs. 409000/- (A)
ii. Term Loan
Component
1st year : cost of 2+2 Dairy Unit
Purchase of Tractor
Total Term Loan
Rs. 100000/-
Rs. 600000/-
Rs. 700000/- (B)
Maximum Permissible limit/KCC Limit A+B = Rs. 11,09,000/-
Note Drawing limit will be reduced every year on
repayment schedule of term loan(s) availed
and withdrawals will be allowed up to the
drawing limit.
Application & documents to
be obtained for full limit for 5
years. Of course , Proposal to
be prepared for full limit .

21. ISSUE OF ELECTRONIC
KISAN CREDIT CARDS (ATM)
All new KCC must be issued as smart card cum debit card as laid
down in Policy.
Further, at the time of renewal of existing KCC; farmers must be
issued smart card cum debit card.
The short term credit limit and the term loan limit are two distinct
components of the aggregate KCC limit bearing different rates of
interest and repayment periods.
Until a composite card could be issued with appropriate software
to separately account transactions in the sub limits, two separate
electronic cards may be issued for all new/renewed cards.

22. A. Operation through Branch;
B. Operation through Cheque facility;
C. With drawl through ATM/ Debit Card;
D. Operations through BC and USBs;
E. Operation through POS at Sugar Mills/ Contract Farming;
Companies. Especially in tie up advances;
F. Operation through POS available with input dealers;
G. Mobile based transfer transactions at agriculture input;
dealers and mandies.
DISBURSEMENT OF SHORT TERM CREDIT

23. Short term components from A to E
liquidated in 12 months. No need to
bring zero balance at any point of
time.
Term loan component normally
repayable with in 9 years in installments
as fixed based on activity / income
generation.
REPAYMENT

24. FEATURES OF KCC
Besides the mandatory crop insurance, the KCC holder
should have the option to avail the benefit of any type of
asset insurance, accident insurance (including PAIS), health
insurance (wherever product is available) and have
premium paid through his/her KCC account.
Premium has to be borne by the farmer/bank according to
the terms of the scheme. Farmer beneficiaries should be
made aware of the insurance cover available and their
consent (except in case of crop insurance, it being
mandatory) is to be obtained, at the application stage itself.

25. Interest subvention for prompt repayment as advised
by GOI/State Government from time to time.
On time documentation for full amount of aggregate
limit.
Simple declaration about crops raised / proposed from
II year onwards.
No bank’s charges as PPC / DOC etc. up to Rs. 3.00
lakhs card limit.
KCC short term limit cum SB a/c, fetch interest for
credit balance at SB interest rate.
FEATURES OF KCC