PROJECT REPORT

ON
“CALCULATATION OF AWRENESS LEVEL IN
FARMERS ABOUT PNB KISAN CREDIT CARD”

Submitted To

PUNJAB NATIONAL BANK

PANTNAGAR BRANCH

Submitted By

HEMENDRA KUMAR JOSHI (39131)

COLLEGE OF AGRIBUSINESS MANAGEMENT

PANTNAGAR

[Type text] Page 1

 Acknowledgement
“There is not a more pleasing exercise of the mind than gratitude. It is
accompanied with such an inward satisfaction that the duty is sufficiently
rewarded by the performance.”
- Joseph Addison
We are beholden beyond words to express our sense of reverence and gratitude to our
Project Guide, Branch Manager of PNB, Pantnagar, for granting us the project for KCC with
PNB. We are highly indebted to Dr. B.K.Sikka (Dean CABM) for his valuable guidance and moral
support, which has always been there to inspire us.

We owe everything to our parents, seniors & friends for their constant blessings,
encouragement and cooperation.
We also want to thank G.B.P.U.A.&T. for organizing this Farmer’s Fair which give us
opportunity to interact with different companies.
Last but not the least; we would like to thank all those helping hands who have contributed
in their own way in driving this project to success.

HEMENDRA Kr. JOSHI

CABM PANTNAGAR

[Type text] Page 2

INTRODUCTION:
Agriculture has been the mainstay of our economy. More
than 58.8% of our people depend upon agriculture for their livelihood even
through contribution of agriculture to our gross Domestic product (GDP) is less
than 17.8%. Nonetheless , the importance of agriculture Cannot be
underestimated for years to come . The National Agriculture Policy waxes
eloquent on the value of agriculture . “Agriculture is way of life , a tradition ,
which for centuries ”.thus runs the opening sentence of the agriculture policy “
has shaped the thought, the outlook, the culture and the economic life of the
people ”.Rapid agriculture growth will not only ensure continued food security
but also aid in growth in industry and the GDP . To sustain the growth in
agriculture credit plays a crucial role.

In order to address the problems in purveying credit

for agriculture , the reserve Bank of India had set up a one man High Level
Committee of Shri R.V.Gupta in December 1997 to suggest measure for improving
the delivery systems as well as simplification of procedure for agriculture credit
.The Committee’s mandate was to identify the constraints faced by the
commercial, bank in increasing the flow of credit, introducing new products and
services and simplifying procedures and methods of working with a view to
enabling rural borrowers to access adequate and timely credit from the
commercial banking system.

Crop loans constitute a major portion of disbursements for

agriculture and farmers need adequate and timely credit in a cost effective and
flexible manner to raise a crop. To take care of his consumption needs, some

[Type text] Page 3

provision is required to make. Working capitals needs off these activities are
required to be met from banking system failing which the farmer may be
constrained to borrow from the informal sector the consequences of which are
well known. Against this background the Kisan Credit Card (KCC) scheme was
introduced in pursuance to the announcement in year 1998-99. It sought to
address many of the issue concerning short term credit needs of farmers. It
aimed at providing timely and adequate credit to the farmers in a cost effective
and flexible manner. In addition to credit for the cop production the scheme
provides for credit for ancillary activities related to crop production, working
capital needs for non-farm activities and allied activities with some provision for
consumption needs. The scheme is being implemented in the country by all the
banks from the year 1998-99. This has now been accepted as the only medium
of short – term credit for agriculture.

Therefore the project in hand has been planned with the following objective:

To calculate awareness about kisan credit card.

To know the utility and satisfaction level by using KCC.
To study about problem faced in kisan credit card.
To study about repayment of kisan credit card.

[Type text] Page 4

2. PNB KISAN CREDIT CARD:
2.1 Purpose:
1. Short term working capital requirement for Agriculture activities.

2. Domestic / consumption requirements.

3. Term credit needs.

4. Against debt from Non-Institutional Lenders.

2.2. Eligibility :
1. Owner cultivator / tenant /lessee or allottee farmers with recorded occupancy rights.

2. Oral tenants ( if land owners agree to become co-borrower or else liquid security

FD/NSC/KVP etc to be obtained).

3. Should have stable financial position & good banking habit.

[Type text] Page 5

2.3 Loan Amount :
Max. Rs.10 lac, to be allowed as under ;-

1. Maximum Rs 5 lakh for cash credit limit for crop production, consumption needs &
working capital for allied activities.
2. Need based term loan within overall ceiling of Rs 10 lakh including cash credit limit
mentioned above & loan (maximum up to Rs 50,000) for relief against indebtedness from
non-institutional money-lenders.
2.4 Repayment :
1. Aggregate credits in to the account during 12 months period should at least be equal to
the maximum outstanding in the account.
2. No drawal in the account to remain outstanding for more than 12 months(18 months for
the long duration crops such as sugarcane etc. or for agrl. Activities ).

Term loan including loan for relief against indebtedness from non institutional lenders may
be repayable in 5 years. However, in case of term loan for tractors, etc where repayment
period is more than 5 years, longer repayment period as prescribed under the Scheme
shall be allowed
2.5 Rate of interest:
Presently , rates of interest for agriculture advances is as under:
Loan Rate of Interest (p.a)
(i) Production Credit:

    Upto Rs.3 lakh 7.00%**

    Above Rs.3 lakh BPLR

(ii) Investment Credit:

    Upto Rs.50,000 BPLR-2%

Above Rs.50,000 but upto Rs.2 BPLR-1%

lakh
3.ME
BPLR
    Above Rs.2 lakh to Rs.10 lakh
TH
OD
OLOGY

[Type text] Page 6

 3.1Survey Instrument:

Structured questionnaires ( open and closed endedand ) were

developed and used as a research tool for conductive the interview of the
farmers.

3.2 Data source :

Primary data was collected by survey method through personal

interview of farmers .

3.3 Sampling size :

The survey is conducted on the response of 100 farmers

3.4 Data analysis :

1. frequency Distribution

For analyzing land holding , bank from which they take KCC, problem faced in
KCC and satisfaction level by using KCC .

3.5 Questionnaires copy :

( As Annexure 1)

4.RESULTS AND DISCUSSION :

4.1 land holding pattern :
It has been observed that almost 72% of the farmers have land
holding of below 10 acres which reinforces the poor agricultural condition of

[Type text] Page 7

 the Indian farmers due to fragmented land holding .

Land Holding Pattern ( Acres)

10% 2%

16%

1-10 acres
11-20 acres
21-30 acres
31-40 acres

72%

Exhibit 4.1 Land Holding Pattern of farmers

4.2 Availing the kisan credit card facility:

It is observed that 79 % of farmers are using this facility as this

facility facilitate them for easy availability of cash for purchase of agri-inputs like
fertilizer and pesticides and also for their basic home amenities at low interest
rate.

[Type text] Page 8

 Availing KCC
no
21%

yes
79%

Exhibit 4.2 availing KCC facility by farmers

4.3 Bank wise percentage in KCC:

It is observed that commercial bank (public & private sector bank),

cooperative bank, RRB are providing KCC facility to farmers. It is found that SBI &
BOB, other bank (RRB and cooperative bank) comparatively providing more
advance through KCC in this area. In percentage wise contribution are 32%, 28%,
27%, 10%, and 3% by other bank, SBI, BOB, PNB, and UCO respectively.

[Type text] Page 9

 32% 28%
SBI
BOB
PNB Exhibit 4.3 bank
UCO wise % in KCC
OTHER
3% 10% 27%
4.4 Problem
faced in Kisan
Credit card:

As in KCC is for meeting the financial need to farmers like crop loan and other
items of production credit / working capital / short – term capital requirement for
non- farm activities . Besides this as we noticed that farmers are getting problem
in KCC like involvement of commission agent , inadequate credit amount ,delay in
card issue, repayment schedule for the KCC etc problem are faced by the farmers

Problem Faced In KCC

36%

Problem faced
No problem faced

64%

Exhibit 4.4 Problem faced in KCC

4.5 Satisfaction level of farmer :

[Type text] Page 10

 Out of the 100 farmers interviewed , 37% farmers are extremely satisfied while
49% are satisfied and remaining are not satisfied with KCC . As there were no
major problem reported in operations of kisan Credit card .As KCC holder were
of the unanimous opinion that the Kisan Credit Card was advantage to them in
more than one way as it provided them:

1. Timely availability of credit

2. Reduction in cost of accessing credit
3. Saving in cost in annual renewal
4. Adequate credit

Satisfaction Level Of Farmers

Extremely satisfied Satisfied Not satisfied

14% 37%

49%

Exhibit 4.5 Satisfaction level of farmers

[Type text] Page 11

 5. Problems &Suggestions :
KCC is one of the most innovative , widely accepted highly appreciated non –
discriminatory banking products . It is highly beneficial to farmers as it supply easy
and timely credit access to farmers, despite all this , Kisan Credit Card scheme is
not free of problems . Based on discussion with farmers at kisan mela we brought
certain aspect of kisan credit card which are under following heading.

1. Adequate credit :
As the KCC scheme envisaged coverage of all the short term credit
needs of farmers but 40% of farmers also borrow money from other
source because of credit given by KCC is not adequate for them. So on
that issue bank may provide highly amount of loan to the farmers and
to satisfy their needs and wants .
2. Involvement of commission agent:
In public sector bank at bottom level there are involvement of
commission agents ( dealers) that increase corruption , amount of credit
given to farmer is not reach to their hand. It leads to default in
repayment. to overcome this problem their should be direct approach of
banks official to the farmers it will eliminate commission agent.
3. Operations of KCC :
Farmers due to their previous experiences are apprehensive that if they
repay their loans before the due date they would not get repeat loans. In
this prospect bank guidance will benefit both the party. As per our survey
around 30% of the farmers are utilizing their kisan credit card effectively,
but 70% farmers did not make frequent operations on the limit
sanctioned to them under the card. Complicated procedure of drawls

[Type text] Page 12

 based on the seasonal sub-limits of the total limit mainly responsible for
ineffective use of kisan credit card.
4. End use of the credit:

Our observation from the survey indicates that all the farmers had used
the credit limit firstly to finance their expenses on raising the crops. A significant
number of the farmer use the credit for meeting their working capital and other
short term needs for farm and non-farm activities also. A supervised credit system
in this regard will serve the purpose in a better way.

5. Purchase of fertilizers & other inputs:

[Type text] Page 13