9
extending RuPay cards to every farmers would add an extra expenditure to them
if the farmers go beyond the minimum number of free transactions (five) allowed
on ATMs of other banks.
Macro Estimates of benefits from KCC financing
41. The total crop loan issued through KCC during the 2014-15 was Rs. 6,35,412
crore which translated into a crop loan of Rs. 85,757 per live KCC account. The
average crop loan disbursed per account came to Rs. 31,923. The agricultural
cropped area covered by KCC (arrived at by multiplying 7.41 crore operative KCC
accounts with the average size of holding 1.15 ha) has been estimated at 85.208
mill ha (241.99 mill acre). The net farm income net of interest (9% per annum
on Rs. 6,35,412 crore) has been estimated at Rs. 62,670 crore which clearly
indicates that availability of credit from institutional sources through KCC mode
has made significant contribution to the farm income of the farmers.
42. Gross increase in net farm income per annum (net of interest burden) of all the
KCC holders in the country due to interest Subvention (i.e. KCC loan at 7% per
annum) to eligible farmers had been estimated at Rs 71,968 crore. And if all the
farmers repay their loan in time, the gross increase in net farm income (net of
interest burden) will go up to Rs 85,858 crore.
Recommendations
1.
Present CBS system of most of the banks don’t have provision to bifurcate the
Kisan card limit into separate sub limits of crop loan component, consumption
credit and asset maintenance component. Although, making suitable amendments
in CBS system of banks to facilitate fixation of sub-limits under KCC is a good
option, it is felt that creating multiple accounts for small amounts will not only
increase the number of accounts to unmanageable level but it will also put
pressure on human resources and CBS. It is recommended that the Government
should consider the entire amount of KCC limit (including consumption & assent
maintenance) for interest subvention and incentive for prompt repayment within
the prescribed limits.
2.
Most of the banks have not revised their ‘application cum appraisal form’ of KCC
loan in line with the provisions under revised KCC guidelines, 2012. The banks
may consider revising their KCC ‘application cum appraisal form’ to suit with the
requirements of the revised KCC Scheme.
3.
The fixation of KCC limit should be viewed seriously by the bankers and it should
be arrived at by taking into account the cropping pattern and the scale of finance
for the latest year. The role of ‘Scale of Finance’ is sometimes undermined,
particularly in case of cooperative banks when the KCC limits arrived at by using
the scale of finance & cropping pattern are capped by certain amounts.
4.
Since the accurate information on coverage of actual number of farmers, as well
as, area covered under KCC is very difficult to estimate, it is suggested that the
