CENTRAL OFFICE

PRIORITY SECTOR, RURAL DEVELOPMENT DEPARTMENT

Master Circular No. : 2015 - 01

Date : 01.01.2015

CENTRAL KISAN CREDIT CARD SCHEME

Product Code : 6182 1001
Scheme at a Glance:
Objective: To provide adequate and timely credit under a single window for :
a. Short term expenses for cultivation of crops; b. Post-harvest
expenses; c. Marketing of produce; d. Consumption requirements
of farmer household; e. Working capital for maintenance of farm
assets and allied activities like dairy animals, inland fisheries etc.
Eligibility: All farmers- individuals/Joint borrowers, Tenant
farmers, Oral lessees, share croppers, SHGs, JLGs of farmers
including tenant farmers, share croppers etc.
Fixation of limit: Separately for 1. Marginal farmers and 2.
Others.
Drawing limit to be fixed on the basis of cropping pattern. RMs can
allow limit up to 175% of Scale of finance on selective basis.
Nature of Credit: Revolving credit and permits any number of
drawls and payments.
Margin: No separate margin required as it is inbuilt in the scale of finance.
Rupay KCC Cards: To be issued to all the eligible existing and
new CKCC
borrowers.
Collateral Security: Collateral security to be obtained on
aggregate Agri. Advance of more than Rs.1.00 lac. In tie-up loans
up to Rs.3.00 lakh RMs can waive collateral security. Loans of
over Rs.3.00 lakh are to be fully covered by collateral security.
RMs can allow deviation up to 50% in collateral security.
Interest: @ 7% where interest subvention is permissible; in other
cases, the rate as applicable to direct agriculture advances.
Service Charges: For production credit, all types of service
charges waived. For other than production credit, Processing and
Inspection charges are applicable as per extant guidelines.
Documentation charges waived.
Repayment: To be fixed by the branches as per cropping pattern

and anticipated harvesting/ marketing of the produce.

IRAC norms: As applicable to Direct Agriculture Advance.

THE SCHEME IN DETAIL

1

Objective 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 & 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.

(The aggregate of components a. to e. above will form the short term credit
limit portion.)
2

Eligibility i. All Farmers Individuals / Joint borrowers 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.
Nature
The short term component under the scheme would be in the nature of
of credit revolving credit and provide for any number of drawls and repayments
within the limit.

Fixation of limit:
A. For all farmers, other than marginal farmers
1.

For farmers raising single crop in a year:

i) The short term limit for the first year is to be arrived as under :Scale of finance for the crop (as decided by DLTC)

Extent of area cultivated

+
10% of limit towards post-harvest / household / consumption requirements

+
20% of limit towards repairs and maintenance expenses of farm assets

+
Crop insurance, PAIS & asset insurance
ii) Limit for second & subsequent years to be arrived at as under:
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 years (2 nd,
3rd, 4th and 5th year).

2. For farmers raising more than one crop in a year,

The limit is to be fixed, as specified 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. (refer Illustration I)
Maximum Permissible Limit: The short term loan limit arrived for the 5th year will be
the Maximum Permissible Limit (MPL) and treated as the Kisan Credit Card Limit.
In case of Production credit limit Regional Managers are empowered to fix the limit up
to 175% of scale of finance prevailing in the area, taking into account all the local
conditions pertaining to cost of production. Such discretion should be exercised on merit
and on case to case basis.
It should also be ensured that the above facility is not misused. Further, to facilitate
monitoring, all such sanctions by Regional Managers should be reported to Priority
Sector Deptt., (RD Cell) on a Quarterly basis so as to reach us latest by the 10 th of the
following month.
Fixation of Sub-limits out of above limits
i.

Drawing limit for short term cash credit should be fixed based on the
cropping pattern and the amount 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 by the district level
committee exceeds the notional hike of 10% contemplated while fixing the limit for
five year, a revised drawable limit may 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.
ii. Wherever the card limit/liability so arrived warrants additional security, it
is advised to take suitable collateral security of sufficient value.

B.

For Marginal Farmers

A flexible limit of Rs.10,000/- to Rs.50,000/- be provided (as Flexi CKCC) based

on the land holding and crops grown including post-harvest warehouse storage
related credit needs, farm expenses and other consumption needs, etc.
The CKCC limit is to be fixed for a period of five years on this basis.
Wherever higher limit is required due to change in cropping pattern and/or scale
of finance, the limit may be arrived at as per the illustration given for marginal
farmers (illustration II).
5

Issuance
of Card

Margin

All eligible CKCC account holders are to be invariably issued Rupay

KCC card.
For crop loans no separate margin need to be insisted as the margin is
in-built in scale of finance.

Security

Primary Security:
a.

Hypothecation of crops for all CKCC accounts.

b.

Where CKCC is combined with term loan facility, in addition to

hypothecation of crop, asset created out of term loan should also
to be hypothecated.

Collateral Security:
a. No collateral Security/guarantee is to be obtained on loans up to
Rs.1.00 lakh.
b. Collateral security should be obtained for loan limits of above
Rs.1.00 lakh, taking all loans granted to the borrower into
consideration in case such loans are not under tie-up arrangement
for recovery.
c. In case of loans tied-up for recovery, Regional Managers are
empowered to waive collateral security on such loans of up to
Rs.3 lakh, based on the strength of tie up arrangement.
d. In cases other than a & c above, total value of collateral should
be at least 100% of loan amount. However, Regional Manager
may allow deviation up to 50% in collateral security.

In States where the facility of on-line creation of charge on the

land records is available, the same must be created.

Disbursement The KCC limit is in the nature of revolving cash credit facility. There will

be no restriction in number of debits and credits. The drawing limit for

the current season/year only could be allowed to be drawn using any
type of the five delivery channels.
a. Operations through branch
b. Operations using Cheque facility
c. Withdrawal through ATM / Debit cards
d. Operations through Business Correspondents and ultra-small
branches
e. Operation through PoS available in Sugar Mills/ Contract farming
companies, etc., especially in case of tie-up advances
f. Operations through PoS available with input dealers
g. Mobile based transfer transactions at agricultural input dealers
and mandies.
9

Rate
of CKCC with interest subvention facility:
interest
i. The production credit limit and also loan against warehouse receipts
(pledge loan) are at present eligible for interest subvention and
hence, the applicable rate of interest will be based on the
Government of India/RBI guidelines issued from time to time.
ii.

RBI has further clarified that in order to avail benefit of interest

subvention, the borrower should be an agriculturist, rate of interest
charged should not be more than the rate stipulated by GOI, loan
should be fixed as per scale of finance and used for the purpose and
seasonality is observed regarding disbursement and recovery.
4

iii.

At present interest rate on short term production credit in accounts

eligible for interest subvention is 7% for a maximum period of 12
months. However, subvention will be available only in respect of
short term credit requirement for cultivation of crops and postharvest expenses up to Rs.3.00 lac per farmer. Other components
of KCC are not eligible for interest subvention. It is further
clarified that in case of loans of more than Rs.3.00 lacs, interest
subvention is available on amount up to Rs.3.00 lacs.

iv. Crop loan accounts which are overdue or irregular and also
restructured accounts shall not qualify for interest subvention and
normal ROI i.e. without interest subvention should be charged.
v. As per extant guidelines of Govt. of India the farmers are also
eligible for additional interest subvention for prompt payment of
their short term credit limit. This should be popularized among
farmers to motivate them for timely repayment and the subvention
should also be credited to the farmers accounts in time.
CKCC without interest subvention facility:
Interest on CKCC without interest subvention facility will be charged as
per the extant rate of interest on Direct Agricultural advances, circulated
vide our Instruction Circular No.1403 dated 01.01.2015.
10

Validity/
renewal

i.
ii.

CKCC is valid for 5 years, subject to annual review.

The review 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.

iii. When the branch has granted extension and/or reschedulement of the period of repayment on account of natural
calamities affecting the farmer, the period for reckoning the
status of operations as satisfactory or otherwise would get
extended together with the extended amount of limit. When the
proposed extension is beyond one crop season, the aggregate of
debits for which extension is granted is to be transferred to a
separate term loan account with stipulation for repayment in
installments.
iv. Documents to be renewed whenever due for renewal.
11
12

Service
Charges
Documents
to be
obtained

Nil
1.
2.
3.
4.

Loan application
Revenue records (Khatauni & Khasra, 7/12 extract, etc.)
Demand Promissory Note.
Loan cum Hypothecation Agreement (Crop, Animal, Livestock, Plant
& Equipment, Machinery etc.)
5. Letter of Guarantee, wherever applicable.
6. Form for creation of charge on agricultural land, wherever applicable
7. LSR from Banks empanelled lawyer, (wherever required).
8. Renewal application form (in the case of renewal)
9. Letter of interest (variation)
10. Letter of continuity for CKCC.

13
14

15

Stamp
Duty
Crop
Insurance

Other
Terms &
Conditions

As per the prevailing rate in the State.

All notified crops to be covered under crop insurance.
Objectives of Insurance Coverage:
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 stabilize farm income, particularly in disaster years.

To support and stimulate production of food crops and oilseeds.

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

1. Besides the mandatory crop insurance, the KCC holder should

have the option to take benefit of Assets Insurance, Personal
Accident Insurance Scheme (PAIS) and Health Insurance
(wherever product is available) and have premium paid through
his KCC account. Necessary premium will have to be paid on the
basis of agreed ratio between bank and farmer to the insurance
companies from KCC accounts. Farmer beneficiaries should be
made aware of the insurance cover available and their consent
(except in case of crop insurance, if mandatory) is to be obtained,
at the application stage itself.
2. One time documentation will be done by the branches for
maximum limit fixed for the fifth year. Thereafter, simple
declaration (about crops raised/Proposed) to be taken from the
farmer from second year onwards. The renewal of documents will
have to be done by branches within three years as per Bank norms.
3. Operating limit will be fixed by branches for each year as per
assessment within the sanctioned limit fixed for five years.
4. Conversion/Reschedulement of loans permissible in case of
damage to crops due to natural calamities.
5. In case the farmer applies for loan against the warehouse receipt of
his produce, the branch should consider such request as per the
established procedure and guidelines. However, when such loans
are sanctioned, these should be linked with the crop loan account if
any, and the amount outstanding in the crop loan account to be

adjusted out of the proceeds of the pledge loan.

6. While financing against warehouse receipts, all stipulations of our
scheme for financing against warehouse receipts to be observed.
7. The farmers who defaulted (other than on account of Natural
calamities) to any financial institution will not be eligible for
finance from our Bank.
8. Before enhancing the KCC limit, it is to be ensured that the
borrower is regular in repayment of loans.
9. CIBIL Report to be verified.
10. Due diligence to be done and KYC norms to be observed
16

17

Supervision
and follow
up

Pre sanction inspection should be conducted in each case.

Post sanction inspection should be carried out at least once in six

months.

IRAC
Norms

The extant prudential norms for income recognition, assetclassification and provisioning will continue to apply for loans
granted under KCC scheme. The present norms are as under:
- A loan granted for short duration crops will be treated as NPA, if
the instalment of principal or interest thereon remains overdue for
two crops seasons.

18

Reporting
in LBRs

19

Guidelines
for
effective
implementation of
CKCC

A loan granted for long duration crops will be treated as NPA, if

the instalment of principal or interest thereon remains overdue for
one crop season.

For the purpose of these guidelines, long duration crops would

be crops with crop season longer than one year and crops which
are not long duration crops would be treated as short duration
crops.

The crop season for each crop which means the period up to
harvesting of the crops raised would be as determined by the State
Level Bankers Committee in each State.

Depending upon the duration of crops raised by an agriculturist,

the above NPA norms would also be made applicable to
agricultural term loans availed by him.

Credit limit sanctioned should be reported in LBR-1.

All debit entries (excluding of interest & other charges) should be
reported in LBR-2. Renewal of limit will also be treated as fresh
disbursement.
1. Persuade the farmers who have availed term loans for various
agricultural development purposes, farm mechanization etc. for
availing CKCC also.
2. Adequate publicity through various forums, Gram Sabhas etc. to
create awareness among the farmers.
3. Organize functions in villages inviting public representative or
Government officials to participate and issuing cards in their
7

presence.
20

21

Procedural
Aspects

Delivery
Channels

Branches to issue cards only after sanction/renewal of limits,

execution of documents and creation of charge on land, wherever
applicable.

Cards to be given to the KCC holder against proper

acknowledgement by the borrower.

In case of illiterate borrowers, the delivery of cards should be

witnessed by some other borrower to avoid any dispute in future.

Issue of cards
The beneficiaries under the scheme to be issued with a Smart card/
Debit card/ Rupay cards (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 CKCC holders are supposed to be provided 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.

All the new CKCC accounts are to be provided KCC Rupay cards
invariably. In case of existing accounts, the cards are to be issued at the
time of renewal.

The guidelines contained in this Master Circular will supersede all the
instructions/ modifications pertaining to the Scheme issued earlier. All
branches and offices are advised to take note of the contents of this circular
and ensure compliance.
(R. B. Gupta)
General Manager: PS

Encl: - Illustration I and II for assessment of CKCC limit.

Illustration- I
A. Small Farmer raising Multiple Crops in a year
1. 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.22,000)
2. (i) Crop loan Component
Cost of cultivation of 1 acre of Paddy and 1 acre of Sugarcane
(11,000+22,000)
: Rs.33,000
Add: 10% towards post harvest/household expense/consumption
: Rs. 3,300
Add:
20%
towards
farm
maintenance
: Rs. 6,600
Total
Crop
Loan
limit
for
1st
year
: Rs. 42,900
Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10%
of
42900
i.e.
4300)
: Rs. 4,300
: Rs.
47,200
Loan Limit for 3rd year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10%
of
47,200
i.e.,
4,700)
: Rs. 4,700
: Rs.
51,900
Loan Limit for 4th year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10%
of
51,900
i.e
5,200)
: Rs. 5,200
:Rs.57,100
Loan Limit for 5th year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10%
of
57100
i.e
5700)
: Rs. 5,700
:Rs. 62,800
Say:
Rs.63,000(A)
Maximum Permissible Limit /Kisan Credit Card Limit (A)
: Rs.63,000

B: Other Farmer raising Multiple Crops in a year

1. Assumptions:
2. Land Holding: 10 acres
3. Cropping Pattern:
Paddy- 5 acres (Scale of finance plus crop insurance per acre
Rs.11,000)
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)
2. Assessment of Card Limit
(i) Crop loan Component
Cost of cultivation of 5 acres of Paddy, 5 Acres of Groundnut and
5
acres
of
Sugarcane
: Rs.2,15,000
Add:
10%
towards
post
harvest/household
expense/consumption
: Rs. 21,500
Add:
20%
towards
farm
maintenance
: Rs. 43,000
Total
Crop
Loan
limit
for
1st
year
: Rs.2,79,500
Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10%
of
2,79,500
i.e.,
27,950)
: Rs.27,950
:
Rs.3,07,450
Loan Limit for 3rd year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10%
of
3,07,450
i.e.,
30,750)
: Rs.30,750
: Rs.3,38,200
Loan Limit for 4th year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10%
of
338200
i.e.,
33,800)
: Rs.33,800
:Rs.3,72,000
Loan Limit for 5th year

10

Add: 10% of the limit towards cost escalation/increase in scale of finance

(10%
of
3,72,000
i.e.,
37,200)
: Rs.37,200
: Rs.4,09,200
Say Rs.4,09,000 (A)
Maximum Permissible
: Rs. 4,09,000/-

Limit

/Kisan

Credit

Card

Limit

(A)

Illustration II
Assessment of KCC LIMIT
1: Marginal Farmer raising Single Crop in a year
1. Assumptions:
1. Land holding: 1 acre
2. Crops grown: Paddy (Scale of finance plus crop insurance per acre:
Rs.11,000)
3. There is no change in Cropping Pattern for 5 years
2. Assessment of Card Limit:
1. Crop loan Component (Cost of cultivation for 1 acre of Paddy) :
Rs.11,000
Add: 10% towards post harvest/household expense/consumption : Rs.
1,100
Add: 20% towards farm maintenance
:
Rs. 2,200
Total
Crop
: Rs. 14,300A1

Loan

limit

for

1st

2nd Year :
Crop loan component:
A1 plus 10% of crop loan limit (A1) towards cost escalation/
increase in scale of finance [14,300+(10% of 14300= 1430)]
Rs.15,730A2
2nd

Year

Composite

KCC

Limit

A2

year

:
15730)

11

: Rs.15,730
3rd Year :
Crop loan component:
A2 plus 10% of crop loan limit (A2) towards cost escalation/
increase in scale of finance [15,730+(10% of 15730= 1570)]
:
Rs.17,300..A3
3rd
Year
Composite
KCC
Limit
:
A3
(
17,300)
: Rs.17,300
4th Year :
Crop loan component:
A3 plus 10% of crop loan limit (A3) towards cost escalation/
increase in scale of finance [17,300+(10% of 17300= 1730)]
:
Rs.19,030..A4
4th
Year
Composite
KCC
Limit
:
A4
(
19,030)
: Rs.19,030
5th Year :
Crop loan component:
A4 plus 10% of crop loan limit (A4) towards cost escalation/
increase in scale of finance [19,030+(10% of 19,030= 1,900)]
:
Rs.20,930..A5
5th
Year
Composite
KCC
Limit
:
A5
(
20,930)
: Rs.20,930
Say Rs.21,000
Maximum Permissible Limit / Composite KCC Limit
: Rs.21000
NOTE: All the above costs estimated are illustrative in nature. The
recommended scale of finance / unit costs may be taken into
account while finalizing the credit limit.

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