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Acknowledgement ³There i s not a more p leasin g exerci se of the mind than gratitude. It i s
acco mpanied with su ch an inward sati sfaction that the duty is su fficient ly rewa rd ed 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.


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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 provision is required to make. Working capitals needs off these activities are

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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.

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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.

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

1. 2.

Maximum Rs 5 lakh for cash credit limit for crop production, consumption needs & working capital for allied activities. 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
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 (i) Production Credit: Upto Rs.3 lakh Above Rs.3 lakh (ii) Investment Credit: Upto Rs.50,000 Above Rs.50,000 but upto Rs.2 lakh Above Rs.2 lakh to Rs.10 lakh Rate of Interest (p.a)

7.00%** BPLR


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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)

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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 the Indian farmers due to fragmented land holding .

Land Holding Pattern ( Acres)
10% 16% 1-10 acres 11-20 acres 72% 21-30 acres 31-40 acres 2%

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.

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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.

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10% 3%



Exhibit 4.3 bank wise % in KCC 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


Problem faced 64% No problem faced

Exhibit 4.4 Problem faced in KCC

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Satisfaction level of farmer :

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% 49%


Exhibit 4.5 Satisfaction level of farmers

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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

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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:

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