Swarojgar Credit Card

Overview

Objective

• SCC Scheme aims at providing adequate and timely credit ie. working capital or block capital or both to small artisans, handloom weavers, service sector, fishermen, self employed persons, rickshaw owners, other micro-entrepreneures, SHGs, etc from the banking system in a flexible, hassle free and cost effective manner.

• Borrowers in urban areas can be covered under SCC Scheme. Small business covered under priority sector is also eligible under SCC Scheme.

• Any scheme/project that are income generating/ employment generating may be covered under the scheme. The facility may also include a reasonable component for consumption needs.

• Farm sector activities like fisheries, dairy, etc. can also be covered under the scheme. Generally such of the self-employment activities which have regular turn over/income stream on short-interval basis can be covered under SCC scheme.
  

Credit Card

• SCC to SHGs
  
  
• Nature of financial accommodation
  
  
• Quantum of limit
  
  
• Renewal of SCC limits
  
  
• Interest on credit balance
  
  
• Validity
  
  
• Issue of cards
  
  
• Operation of the scheme
  
  
• Insurance
  
  
• Security/Margin/Rate of interest /Prudential norms
  
  
• NABARD refinance
  
  
• Monitoring
  
  
• Promotional Support from NABARD

SCC to SHGs

Self Help Groups (SHGs) can also be issued SCC and members will be liable jointly and severally for repayment. As the Groups mature, some members may graduate to entrepreneurs and start their own micro- enterprises with or without the support of the SHGs. In such cases, SCC may be issued to members in individual capacity.

Nature of financial accommodation

Quantum of limit

Upto Rs. 25,000/ per borrower as composite loan. This is indicative. Banks may consider higher limits on the merits of the case. A component for consumption credit could be built in keeping in view the value of the family labour in the productive activity. The total limit would have a relationship with the projected net earning and the repayment capacity of the borrower.

Renewal of SCC limits

Limits will be renewed annually based on the amount credited to the cash credit account /repayments.

Interest on credit balance

Interest as applicable to SB A/c may be paid to the borrowers on the credit balance under the account.

Validity

SCC is normally valid for 5 years subject to satisfactory operation of the account and renewed on a yearly basis through simple review process.

Issue of cards

The beneficiaries under the scheme will be issued with a laminated credit card and a pass book. This will serve as an identity card and facilitate recording of the transactions on an ongoing basis. Banks may modify the format keeping in view the relevant data/ information required. A passport size photograph of the holder will be affixed on the card at the space provided for .The card holder would be required to produce the card and the pass book for operations in the account.
As far as possible cluster approach may be followed in implementing the scheme.
In case smart cards are issued, fees towards issue of card/processing may not exceed Rs 50/- per card.

Operation of the scheme

The banks may at their discretion permit operations through the designated branches, taking into account the convenience of the clientele.
Opening of SB A/c should not be a precondition for issue of SCC.

Insurance

Beneficiaries under the scheme would automatically be covered under the group insurance scheme and the premium would be shared by the bank and the borrower equally. Each bank may negotiate the terms of insurance with a company of its choice on a national or regional basis. Further, as advised by General Insurers’ (Public Sector) Association of India (GIPSA), it would be advisable for the banks to take up the matter of Personal Accident Insurance linked with SCC scheme individually with the Insurance Companies. Since many banks have tie-ups for bancassurance agreement with General Insurance Companies they may decide to include SCC scheme also under their tie-ups.

NABARD refinance

NABARD refinance will be provided for advances under SCC Scheme to eligible banks against their lendings to the borrowers in rural areas as per norms under the Enterprise Loan Scheme.

Monitoring
NABARD has been nominated by Govt. of India as the nodal agency for monitoring the scheme. Banks are required to report monthly progress to concerned Regional Offices of NABARD to facilitates monitoring.

Promotional Support from NABARD

NABARD has introduced a pilot scheme for supporting a total of 90 select RRBs and Cooperative Banks in their efforts to promote SCC scheme. The objective is to generate greater awareness about the scheme and cover maximum number of borrowers, educate the cardholders to use the cash credit facility optimally and effectively, and improve credit flow at ground level. The pilot scheme would facilitate the identified banks to issue more SCCs and would be in operation upto 31 March 2007. The identified banks (RRBs/SCBs/SCARDBs) would be reimbursed the expenditure incurred on publicity of SCC scheme on a cost sharing basis of 60:40, subject to a maximum of Rs.1 lakh.