Study on Implementation of KCC Scheme - page 16

Charges levied by Banks on KCC accounts
25. NABARD vide circular dated 13 Sept 2012 had suggested that the processing
fee may be decided by the respective bank. The most common type of charges
levied by the banks were annual charges, inspection charges, processing charges,
ledger folio charges, cash handling charges, ATM issue charges, Miscellaneous
charges, SMS charges, etc. These charges were found to be varying from bank to
bank, even branch to branch of the same bank. However, these charges are not
very high and account for less than one percent of total loan disbursed during the
Number of Kisan Credit Cards with a Farmer
26. Some of the farmers had taken KCC from more than one bank, normally one
from cooperative bank and the other from either a commercial bank or a regional
rural bank. Such farmers, despite average loan sanctioned by cooperative banks
being quite less, still preferred to have KCC from cooperative bank just to get
good quality fertilizer and seed, etc.
Impact of KCC on Farm Income
27. The average farm income per farmer as well as per acre of KCC holders was
compared with that of Non-KCC farmers in order to arrive at the gain from KCC
financing. The farm income per household and per acre in case of KCC farmers
was estimated at Rs. 1,49,060 per farmer which translated into Rs. 26,809 per
acre (avg land holding 5.21 acre) on the KCC sample farms. The farm income
per household and per acre in case of non-KCC farmers was estimated at Rs.
69,850 per farmer which translated into Rs. 21,346 per acre on the KCC sample
farms (avg land holding 3.04 acre). The average gain per acre on account of
KCC loan comes to Rs. 5,463 with minimum gain of Rs. 858 in Akola district
of Maharashtra and maximum of Rs. 13,657 in Moradabad district of Uttar
28. While the income net of interest burden was as high as Rs. 13188 per acre in
Moradabad district, the farmers of Akola (net income was (-) Rs. 366/ acre) and
Bellary (net income was (-) Rs. 359/ acre) were not able to liquidate interest
burden of KCC. However, with the support of 2% interest subvention to banks
and 3% incentive on prompt repayment, all the farmers including those of Akola
and Bellary were able to generate some gain over non-KCC farmers. The average
gain in net income of KCC farmers over non-KCC farmers was estimated at Rs.
2974/ acre when 2% interest subvention was taken into account and a gain of Rs.
3548/ acre when calculation was made assuming all farmers would be repaying
their dues within the stipulated time period.
29. The overall impression is that the implementation of KCC scheme has certainly
benefitted to agriculturists albeit in varying magnitude to different farmers
depending upon the availability and quality of land resources and their
capacity to manage various resources. There may be some issues relating to
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