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eCircular

Serial No. 449/2012

AGRI BUSINESS DEPARTMENT


Circular No. AGRI/14/2012

Date: 09 August 2012

All Branches / Controlling Authorities


And Departmental Heads at Head Office

REVISED SCHEME FOR KISAN CREDIT CARD

Synopsis Kisan Credit Card Scheme ( Revised)-with 5 years validity period-ATM card/SBT Kisan
Card to be issued to KCC Holders SB Interest for credit balance

Attention of the branches is invited to the Kisan Credit Card Scheme vide our
circulars
Agri. Cir,32/1998 dated 05.11.1998 Scheme guidelines Agri Cir.No.9 / 2000 dated
02.03.2000- clarifications AGRI circular No. 6/2010 dated 11.06.2010 products
eligible for subvention, navigation for changing product, Agri cir No. 16/2010 dated
14.10.2010 Personal Accident Insurance, Agri.Cir. Lr.No. 10/2012 dated
29.05.2012 -- Waiver of Processing Charges.
Reserve Bank of India since advised Banks to implement Kisan Credit Cards (KCC)
Scheme with the Revised guidelines, issued by them and the Govt. of India. The
revised Kisan Credit Card Scheme is enclosed.
Branches are advised to sanction the new KCC loans and the renewal of existing
KCC loans as per the revised guidelines, with immediate effect. Further, all KCC
borrowers (including renewal) shall be issued an ATM-cum-Debit card ( SBT
Kisan Card ) .
Please bring the contents of the circular to the notice of all staff members.
Branches may refer to our Department, for any further clarification and guidance in
this regard.
S.VASUDEVAN
GENERAL MANAGER
(PSL, RB &FI)
Index under Credit flow to Agri-Kisan Credit
card-Revised Scheme

Agri. Cir.No. 14/2012 dated 09.08.2012

Revised Kisan Credit Card (KCC) Scheme


RBI has revised the Kisan Credit Card (KCC) scheme with a view to simplify and
attune the scheme to suit to current requirements and advised banks to implement
the revised Kisan Credit Card (KCC) scheme. Based on the guidelines issued by RBI
/ GOI, it has been decided to implement the Revised KCC Scheme as under:

1. Eligibility:
i.

All farmers-individuals/Joint borrowers who are owner cultivators.

ii. Tenant farmers, Oral lessees and Share Croppers etc.


iii. SHGs or Joint Liability Groups of farmers including tenant farmers, share
croppers etc.

2. Fixation of Limit:
Short term credit limit is fixed for the first year depending upon
i) Short term credit limit is fixed for the first year depending upon
the crops cultivated as per proposed cropping pattern & scale of finance (as
decided by District Level Technical Committee)
ii) Post harvest/household/ consumption requirements at a maximum of 10% of
limit (assessed as (i) above)
iii)To a maximum of 20% of limit towards repairs and maintenance expenses of
farm assets, crop insurance, Personal Accident Insurance Scheme (PAIS) and
Asset insurance.
iv) For every successive year (2nd,3rd ,4th & 5th years, the limit will be stepped up
@10 % ( short term credit limit sanctioned for the 5th year will be about 150 %of
the first year limit allowed to farmers. )
v) Investment credit requirement of small value in the nature of towards land
development, minor irrigation, purchase of farm equipments and allied
agricultural activities. etc. and repayable within a period of one year will be
included while fixing KCC limit .( This portion of the credit limit will not be
included for automatic step up during 2nd to 5th year but credit
requirement for this portion in each year will be reckoned for arriving at the
maximum drawal limit for the respective year. )
vi) The short term loan limit arrived for the 5th year as in ( iv) plus estimated
investment loan requirement as in (v) (higher among the five years ) above will
be the Maximum Permissible limit ( MPL) and sanctioned as the Kisan Credit
Card Limit..
vii) Short term loan limit assessed for the first year or for the 2nd to 5th year plus
the estimated investment credit limit required , as in (IV ) and (v) above, will be
the Maximum Drawal Limit ( MDL) allowed in the account , for the particular
year.
viii) Marginal farmers will be sanctioned a composite limit ( as Flexi KCC Limit )
of Rs.10,000/- to Rs.50,000/- based on the land holding and crop grown + small

term loan investments, ( repayable in one year ) without relating to the value of
land.
3. Security:
a) Primary:
Hypothecation of crops grown
b) Collateral:
Limit up to Rs. 1 Lac Nil
Limit above Rs. 1 Lac- Equitable mortgage of landed property
Maximum Permissible Limit (sanctioned KCC limit) has to be considered for the
purpose of fixing collateral security requirement.

4. Repayment Period:
I.Each withdrawal should be allowed to be liquidated in 12 months, without the
need to bring the debit balance in the account to zero at any point of time.
However, no withdrawal in the account should remain outstanding for more than
12 months.
ii. If any withdrawal is not liquidated within 12 months, the borrower will not be
eligible for further withdrawals.
5. Interest rate:
Rate of interest for KCC account is based on the Maximum Drawal Limit (not
on Maximum Permissible Limit).
Short term production credit loans for limit up to Rs 3 lacs are eligible for interest
subvention and are presently charged interest @7% up to the repayment period
of 12 months as per GOI directive.
Card rate is applicable for advances outstanding beyond 12 months thereafter
(Ref. Annexure-A, item No.4.)

6. Nature of account:
KCC will be in the nature of revolving account. Credit balance in the account,
if any, to fetch interest at Savings bank rate.
7. Validity period of KCC Limit:
Validity period of KCC limit will be 5 years, subject to annual review.
Branches shall, therefore, ensure to obtain revival letters before expiry of 3
years wherever applicable, as per the Limitation Act.
8. Processing charges:
i. Processing

charges

as

well

as

charges

for

inspection

mortgage/documentation are waived for KCC limit up to Rs.3 lacs.


ii. For limit above Rs.3 lacs, processing charges will be recovered (as per
Annexure A Item 8), on the basis of Maximum Drawing Limit (and not on
Maximum Permissible Limit) for each year.
9. Disbursements of loan limit through ATM cum Debit card:
I.

KCC borrowers shall be issued an ATM cum Debit card (SBT Kisan Card), to
enable them to withdraw from KCC accounts from ATMs , in addition to the
disbursements at branches.

II.

Capability of the existing ATM linked State Bank Kisan Card will be enhanced
for usage at other delivery channels also, viz. PoS/ BC/ BF channel etc.,

III.

As the CC limit and the term loan limit are two distinct components of the
aggregate card limit bearing different rates of interest and repayment
periods, until a composite card could be issued with appropriate software
to separately account transactions in either sub limits, two separate
electronic cards may be issued.
10. Conduct of the Limit
(a) Withdrawals in the account shall be allowed in KCC account up to the
Maximum Drawal Limit (MDL) fixed for the year.
(b) Maximum Drawal Limit (MDL) will be valid for 12 months.
(c) KCC Limit will be reviewed after 12 months and revised limit (stepped up by
10%, if there is no change in the acreage and cropping pattern) will be fixed as
the MDL for the next year. Simple declaration on the crops raised / proposed
shall be obtained from the borrower from the second year onwards.
(d) The review may result in continuation of the facility, enhancement of the limit
or cancellation of the limit, withdrawal of the facility, depending upon the
cropping area / pattern and conduct of the account.

(e) Similar review and assessment of limit is to be made at the beginning of


every Year till 5th year.
(f) In case the Maximum Permissible Limit (KCC limit) itself is to be enhanced
on account of revisions in scale of finance, change in cropping pattern in the
subsequent years etc the same shall be done by way of new sanction, after
fulfilling other formalities.
11. CLASSIFICATION OF ACCOUNT AS NPA
An account could be treated as standard, when the balance outstanding is
less than or equal to drawing limit [short term (crop) loan] at any point of time
during the preceding one year. In other words, the short term loan (with major
component of crop loan) sanctioned on the KCC can be given the same
treatment as a cash credit account for the purpose of applying prudential
norms and should not be treated as out of order if the balance outstanding is
less than or equal to the drawing limit and each drawal is repaid within a period
4

of 12 months.
Marking of Holiday period
A crop loan granted for short duration crops is treated as NPA, if the principal or
interest remains overdue for two crop seasons. For long duration crops, it is
one crop season, after the due date of the loan...
In short, a crop Loan usually becomes NPA only after 3 years of its
disbursement/renewal (refer Agri. Cir.3/2011 dated 27.05.2011-- War on NPA)
The due date and the holiday period should be properly marked while opening
the account by the branches. (Refer Agri. Cir.14/2012 dated 6 August, 2012)
All other terms and conditions of KCC scheme remain unchanged.
(1)
Details of revised guidelines vis--vis extant guidelines and Illustrations
on assessment of KCC limit are furnished in Annexure -A and B respectively.
(2)

Interest Subvention:

Interest Subvention is provided by Government of India to Public Sector Banks


for sanctioning of short term production credits up to Rs.3 lacs at interest rate of
7% pa.
Interest Subvention / incentive as advised by Govt. of India is available to
farmers for prompt repayment of their short term crop loans.
(3) Insurance Coverage
It is mandatory to cover all eligible borrowers under crop insurance scheme.
The premia from the KCC a/c should be sent in time to Agricultural Insurance
Co. Ltd. as per the circular issued by the Bank from time to time.

The borrower has the option to take benefit of Asset Insurance, Personal
Accident Insurance Scheme (PAIS) and Health Insurance, if the farmer opts for
them. Necessary premium under these will have to be paid to the Insurance
Companies from KCC accounts. Farmer beneficiaries should be made aware of
these insurance schemes, cover available and their consent is to be obtained,
at the application stage it self.
In case the farmer applies for loan against the warehouse receipt of his
produce; we may consider such requests as per the established procedure and
guidelines. However, when such loans are sanctioned, these should be linked
with the crop loan account if any and the crop loan outstanding in the account
should be settled at the stage of disbursal of the pledge loan.
4. Documentation
Revised KCC is a comprehensive credit limit for 5 years with a stepping up
facility every year. Hence Branches are advised to incorporate the amendments
in the Hypothecation agreement (AB1) as furnished in Annexure-C till amended

documents are supplied by our Stationery Department. Further it has since


been decided to have a standardized Sanction Communication Letter
incorporating the revised provisions of KCC. All Branches can use this format
while sanctioning loans under revised KCC. This proforma is on the lines of a
similar Sanction Communication Letter/Letter of Arrangement devised by State
Bank of India.
Branches may also note to obtain Revival Letters before expiry of 3 years as
per the Limitation Act, as mentioned in page-3, point-7

REVISED KISAN CREDIT CARD SCHEME


ANNEXURE - A
Parameter
1

Existing guidelines

Revised guidelines

Eligibility

i)
Owner
i. All
farmers-individuals/Joint
cultivators, tenant
borrowers
who
are
owner
cultivators , share
cultivators
croppers and oral
ii. Tenant farmers, Oral lessees and
lessees
Share Croppers etc
ii)
Agricultural
iii. SHGs or Joint Liability Groups of
borrowers having
farmers including tenant farmers,
good track record
share croppers etc.
for the last 2 years
iii. Credit worthy
new farmers can
also be financed.
Fixation of Based on
A. Other than Marginal farmers
limit
a. Production limit: KCC limit (Maximum Permissible Limit)
Scale of finance for shall be sanctioned based on the short
the crop * extent of term loan requirements and Investment
area cultivated
credit requirement of small value in the
nature of farm implements/ equipments
b. working capital etc Components of short term loan:
for
allied
agricultural activity
i.
The crops cultivated as per proposed
cropping pattern & scale of finance
c. 20% of the limit
per acre. No margin to be insisted
for crop production
when scale of finance is considered.
expenses
and ii. Post harvest/household/ consumption
working capital for requirements @ 10% of (i) above. and,
allied activities as iii. Maintenance expenses of farm assets,
contingency credit crop
insurance,
Personal
Accident
Insurance Scheme (PAIS) and Asset
d. Ancillary credit insurance. @20 % of (I) above.
requirements.
Components of Investment credit for the
purpose of sanction as KCC limit:
Investment credit requirement of small
value in the nature of farm implements/
equipments etc (like sprayer, plough etc.)
and repayable within a period of one year
will be included while fixing KCC limit (This
portion of the credit will not be included
for automatic step up during 2nd year to
5th year but credit requirement for this

portion in each year will be reckoned for


arriving at the maximum drawal limit for
the respective year).
iv. For every successive years (2nd
, 3rd, 4th , and 5th year), the limit will be
stepped up @10%.(short term credit limit
sanctioned for 5th year will be about 150%
of the first year limit allowed to farmers).
v. The short term loan limit arrived for the
5th year as in (iv) plus estimated
investment loan requirement as in (v)
(highest among the five years) above will be
the Maximum Permissible Limit (MPL)
and sanctioned as the Kisan Credit Card
Limit.
Maximum Drawal Limit:
vi. Short term loan limit assessed for the
first year or for the 2nd to 5th year plus the
estimated investment credit limit required,
as in (iv) and (v) above, will be the
Maximum Drawal Limit (MDL) allowed in
the account, for the particular year.

B. Marginal farmers:
A flexible limit of Rs. 10,000 to Rs. 50,000
be provided as Flexi KCC based on crops
grown including post harvest, warehouse
storage related credit needs and other farm
expenses, consumption needs + small term
loan investments like purchase of farm
equipment, establishing mini dairy/backyard poultry without relating to value of
land fixed for a period of 5 years
i. KCC limit of up to Rs.1 lac No
Collateral
No collateral for
collateral security
Security
limit upto Rs 1 lac
ii. KCC limit above Rs.1 Lac- collateral
security by way of equitable
For limit above
mortgage of property.
Rs.1
Lac
,
collateral security
by way of equitable
mortgage
of
property
Rate
of Rate of interest for
Interest
KCC account is
based
on
the SAME
Maximum Drawal
Limit (and not on
8

Maximum
Permissible Limit).
For Kisan Credit
Cards, our Card
Rate is as follows:
I) Upto 50,000/*
1.25 % above
SBT Base Rate
Effective
11.75%pa

Rate-

(ii) Above 50,000/and Upto 2.00 lac* 2.25% above


SBT Base Rate,
Effective Rate 12.75% pa
(iii) Above 2.00 lac
and Upto 3.00 lac* 3% above SBT
Base
Rate, SAME
Effective Rate 13.50% pa
(iv) Above 3.00 lac
and Upto 5.00 lac4% above SBT
Base
Rate,
Effective Rate 14.50% pa
(v) Above 5.00 lac
and
less
than
25.00
lac5%
above SBT Base
Rate,
Effective
Rate- 15.50% pa
(vi) Rs.25.00 lac
and above Based on credit
rating ie.
SB 1&2 14.50%

SB 3 to5 15.75%
SB6 to 7 15.75%
SB8 to 9 - 16%
SB 10 16.50%
SB11 to16- 17%

*However,
effective rate is 7%
p.a only, as per
RBI
instructions,
for short term Agri
production credits
upto 3.00 lac for
the period during
which the account
is
eligible
for
interest subvention
Repayment Loan
to
be
liquidated in 12
months without the
need to bring the
debit balance in
the account to
Zero at any point
of
time.
No
withdrawal in the
account
should
remain outstanding
for more than 12
months
Nature of
Revolving
KCC
account
account

Validity

KCC limit is valid


for 3 years, subject
to annual review.

Processing
charges

i. No fees for limit


upto Rs 3,00,000/ii.
Above
Rs.3,00,000/to
Rs.1
Crore

Rs.500/- per lac


iii. Above Rs 1
Crore Rs.400/- per

Each withdrawal under short term sub-limit


should be allowed to be liquidated in 12
months without the need to bring the debit
balance in the account to Zero at any point
of time. No withdrawal in the account
should remain outstanding for more than 12
months

KCC will be in the nature of revolving


account. Credit balance in the account will
be eligible for interest at savings bank rate.
KCC Limit is valid for 5 years, subject to
annual review. Branches shall, therefore,
ensure to obtain revival letters before
expiry of 3 years wherever applicable, as
per the Limitation Act.
i. No fees for limit upto Rs 3,00,000/ii. Above Rs.3,00,000/- to Rs.1 Crore
Rs.500/- per lac
iii. Above Rs 1 Crore Rs.400/- per lac -recovered on the basis of Maximum
Drawing Limit (and not the Maximum
Permissible Limit) for each year. Minimum
Rs.50,000 Maximum Rs.20 Lakhs
10

I.

I.

lac.
-Minimum
Rs.50,000
Maximum
Rs.20
Lakhs
Disburs I. Revolving cash
ement
credit based on
sowing crop
season.
Operation
through branch
/ ATM

i.KCC borrowers shall be issued an ATM


cum Debit card (State Bank Kisan Card), to
enable them to withdraw from KCC
accounts from ATMs of SBI group, in
addition to the disbursements at branches
through cheques or,
I.
Ii .Capability of the existing ATM linked
State Bank Kisan Card will be enhanced
for usage at other delivery channels
also, viz. PoS/ BC/ BF channel etc.in
due course.

11

ANNEXURE- B
ILLUSTATIONS ON ASSESSMENT OF KCC LIMIT:
Illustration I
Small Farmer raising Multiple Crops in a year
1. Assumptions:
A. Land holding: 2 acres
B. Cropping Pattern: Paddy - 1 acre (Scale of finance plus crop insurance per acre:
Rs.11000)
Sugarcane -1 acre (Scale of finance plus crop insurance per acre: Rs.22, 000/-)
C. Investment/Allied Activities repayable in one year period (like purchase of farm
implement)
to be purchased in 4th year = Rs.10, 000/
2. (i) Crop loan Component
Cost of cultivation of 1 acre of Paddy and 1acre of Sugarcane
(11,000+22,000) : Rs.33,000 (a)
Add: 10% towards post harvest/household expense/consumption: Rs. 3,300 (b)
Add: 20% towards farm maintenance: Rs. 6,600
st

Maximum Drawing Limit for 1 year : = Rs. 42,900 (a+b+c)


Loan Limit for 2nd year
Add: 10% of the crop loan limit towards cost escalation/increase in scale of
finance (10% of 42900 i.e 4300): Rs. 4,300 = Rs. 47,200
Maximum Drawing Limit for 2nd year: Rs 47,200
Loan Limit for 3rd year
Add: 10% of the limit towards cost escalation/increase in scale of
finance (10% of 47200 i.e., 4700): Rs. 4,700 = Rs. 51,900
Maximum Drawing Limit for 3rd year: Rs 51900
Loan Limit for 4th year
Add: 10% of the limit towards cost escalation/increase in scale of
finance (10% of 51900 i.e 5200): Rs. 5,200 = Rs. 57, 100 (a)
Purchase of farm equipment = Rs 10,000 (b)
Maximum Drawing Limit for 4th year
= Rs 67,100 (a+b)
Loan Limit for 5th year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10% of 57100 i.e 5700): Rs. 5,700 =:Rs. 62,800 Say: Rs.63, 000.
Maximum Drawing Limit for 5th year: Rs 63,000
Kisan Credit Card (KCC) Limit
(Maximum Permissible Limit): Rs 67100

12

Illustration II
Other Farmer raising Multiple Crops in a year
1. Assumptions:
Land Holding: 10 acres
Cropping Pattern:
Paddy-5 acres (Scale of finance plus crop insurance per acre Rs.11,000)
Followed by Groundnut -5 acres
(Scale of finance plus crop insurance per acre Rs.10,000)
Sugarcane -5 acres (Scale of finance plus crop insurance per acre Rs.22,000)
nd

Investment loan repayable in 1 year : Rs 50000 to be purchased in 2 year.


2. Crop loan Component
Cost of cultivation of 5 acres of Paddy, 5 Acres of Groundnut and
5 acres of Sugarcane : Rs.2,15,000 (a)
Add: 10% towards post harvest/household expense/consumption: Rs. 21,500 (b)
Add: 20% towards farm maintenance : Rs. 43,000 (c )
Maximum Drawing Limit for 1st year: Rs.2, 79,500 (a+b+c)
Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10% of 2,79,500 i.e., 27,950) : Rs.27,950 Rs.3,07,450
Add: Investment limit (repayable in one year) Rs 50,000
Maximum Drawing Limit for 2nd year Rs 3,57,450.
Loan Limit for 3rd year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10% of 3,07,450 i.e., 30,750) : Rs.30,750 Rs.3,38,200
rd

Maximum Drawing Limit for 3 year Rs 3,38,200


Loan Limit for 4th year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10% of 338200 i.e., 33,800): Rs.33, 800 Rs.3, 72,000
th

Maximum Drawing Limit for 4 year Rs 3, 72,000


Loan Limit for 5th year
Add: 10% of the limit towards cost escalation/increase in scale of finance
(10% of 3,72,000 i.e., 37,200) : Rs.37,200 Rs.4,09,200
Say Rs.4,09,000
th

Maximum Drawing Limit for 5 year Rs 4,09,000


Kisan Credit Card (KCC) Limit
(Maximum Permissible Limit) Rs 4, 09,000

13

Illustration III.
Marginal Farmer raising Single Crop in a year (Flexi KCC)
1. Assumptions:
1
Land holding: 1 acre
2
Crops grown: Paddy (Scale of finance plus crop insurance per acre:
Rs.11,000)
3
There is no change in Cropping Pattern for 5 years
2. Assessment of Card Limit:
First year:
Crop loan component: (cost of cultivation of 1 acre of Paddy): Rs 11,000
Add: 10% towards post harvest/household expense/consumption: Rs. 1,100
Add: 20% towards farm maintenance: Rs. 2,200
Total Crop Loan limit for 1st year: Rs.14, 300 (A 1)
1st Year KCC Limit: (A1) + (B): Rs.14300---- (A1)
2 year crop loan component:
(A 1) plus 10% of crop loan limit (A1) towards cost escalation/
increase in scale of finance [14,300+ (10% of 14300= 1430)]: Rs.15, 730A2
2ndyear KCC limit: A2 Rs 15,730.
3year crop loan component:
Crop loan component:
A2 plus 10% of crop loan limit (A2) towards cost escalation/
increase in scale of finance [15,730+ (10% of 15730= 1570)]: Rs.17, 300..A3
Add: purchase of backyard poultry
(repayable in 1 year) Rs 5,700 ----B
3rd Year Composite KCC Limit: A3+B (17,300+5,000): Rs.23, 000
4thyear crop loan component:
A3 plus 10% of crop loan limit (A3) towards cost escalation/
increase in scale of finance [17,300+ (10% of 17300= 1730)]: Rs.19, 030..A4
4th Year KCC Limit: A4+B (19,030): Rs.19, 030
5thyear crop loan component:
A4 plus 10% of crop loan limit (A4) towards cost escalation/
increase in scale of finance [19,030+(10% of 19,030= 1,900)] : Rs.20,930..A5
5th Year Composite KCC Limit : A5 ( 20,930) : Rs.20,930
Say Rs.21,000
Maximum Permissible Limit KCC Limit : Rs.23,000
NOTE: All the above costs estimated are illustrative in nature. The
recommended scale of finance / unit costs may be taken into account while
finalising the credit limit.
14

Annexure C
Documentation
Amendments in security Documents
1) AB-1 Hypothecation Agreement (Code no.3553)
Clause 11, page No.6
Existing clause
The borrower shall also provide a suitable third party guarantee as and when
required by the Bank
To be amended as
The borrower shall also provide a suitable third party guarantee and/or Mortgage
security as and when required by the Bank
We may advise the Stationery Department for incorporation of the amendments in
the loan documents as above. Till the amended Hypothecation Agreement is made
available at the branches, branches are advised to incorporate the necessary
changes in the Hypothecation Agreement by affixing stamps in indelible ink.
2) Proforma of Sanction Letter/Letter of Arrangement
After making suitable additions if any, to the terms and conditions as applicable, the
enclosed standardized sanction letter may be used.

15

STATE BANK OF TRAVANCORE


(Associate of State Bank of India)
HEAD OFFICE: THIRUVANANTHAPURAM
BRANCH:
SANCTION LETTER
(This letter needs to be signed by the borrower(s)/ Guarantor at the bottom of
every page)
Shri/ Smt./M/S_____________________

Date:

Address

Dear sir(s)/ Madam,


AGRICULTURAL FINANCE
With reference to your application dated ___________ requesting grant of
_________________ (herein specify the nature of loan applied for viz. Crop
Loan, Term Loan etc.) we have pleasure in sanctioning ___________ (herein
specify the type of loan) limit of Rs.________
(Rupees
____________________________ only) on the following terms and conditions.
a.Purpose.
The _____________________
(herein specify the type of loan) should be
utilized for the specific purpose of __________________ (specify the exact purpose
for which the financial assistance is sought) brief details of which are furnished
below.
i. ________________
ii. ________________
iii. _____________
Kisan Credit Card limit has been assessed for 5 years, stepping up of the limit
nd

rd

th

th

assessed for the first year @ 10% from 2 , 3 , 4 and 5 years., at Rs ---------b. Utilisation
The loan will be disbursed to you (herein called as borrower(s) or you) according to
disbursement programme furnished below. (Give the disbursement programme as
indicated in the documents). (other conditions attendant on the disbursement of the
loan may also be specified viz.)
16

1. Disbursement schedule for Kisan Credit Card (KCC) limit:


st

nd

rd

th

1 Year:Rs---------- 2 Year: Rs.------------ 3 Year: Rs----------------- 4 Year; Rs -----th

5 Year: Rs --------------2. Disbursement towards civil works will be made on production or certified
statements of expenditure duly countersigned by the borrower(s) / Agricultural
Department of the ______________ and after personal inspection by the Bank
Officials.
3. Disbursements towards purchase of machinery will be made either on receipt of
machinery and installation thereof in the borrowers farm or against documents
covering dispatch of machinery received through the Bank or by direct remittance to
the suppliers on authorization by the borrower(s), after ascertaining in the latter case
whether machines are ready for delivery.
4. Processing charges/ upfront fee amount of Rs------------for the credit limit/ loan
sanctioned should be paid by you before availing the limit/ loan from the bank.
Inspection and other service charges as may be applicable to the loan should also
be paid by you. The charges are subject to change from time to time as decided by
the bank and will be effected prospectively, after giving public notice.
c. Security
Primary Security: (give brief particulars of assets hypothecated/property details)
Collateral: (hypothecated / pledged / mortgaged property value,details thereof).
Third party guarantee if any (Furnish the name of the guarantor).
d. Documents:
(Give Brief particulars of documents required to be executed by the Borrowers.
e. Interest:
Interest will be charged monthly/quarterly/half yearly as at the end of _________ or
as on the dates the repayment instalments fall due, at the rate of _____________ %
over/below Base Rate/ with a minimum of _________ p.a. rising and falling with the
change in Base Rate / SBAR on the amount outstanding in the account. Enhanced
rate of interest at 1% p.a.will be charged over and above the rate mentioned above
in case of any default committed by the borrower(s) in respect of the conditions
mentioned herein.
Interest will be paid by the bank @ Savings Bank rate on credit balances in
Kisan Credit Card (KCC) accounts.
f.Repayment:
This loan should be repaid as under: (give the details of repayment as stipulated in
the
documents).
g. In the case of KCC each withdrawal should be allowed to be liquidated in 12
months. However, no withdrawal in the account should remain outstanding for more
than 12 months. If any withdrawal is not liquidated within 12 months, the borrower
will not be eligible for further withdrawals
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h. Insurance:
(particulars of Insurance required to be taken on/waiver thereof to be advised
herein).
i. General:
i. Collateral Security in the form of Mortgage should be provided, as per extant
instructions of the bank.
ii. All legal expenses such as lawyers fees, registration charges, etc. should be
borne by you. Further, Processing charges will be charged each year on the
Maximum Drawal Limit.
iii. Original invoices, suppliers receipt for the cost of machinery and other
connected correspondence should be deposited with the Bank.
iv. The Assets charged to the bank should not be disposed of, sold or otherwise
encumbered as long as the Bank loan remains unpaid.
v. The Banks name board should be displayed prominently on the machines
pledged/ hypothecated to the Bank.
vi. The advance is also subject to the terms and conditions stipulated in the
documents for the loan granted and also other conditions, if any, stipulated by the
Bank from time to time.
vii. KCC limit will be valid for 5 years, subject to annual review based on the cropping
pattern/conduct of the account.
viii. In the case of loans granted under the scheme approved by NABARD, we will
pass on the commitment charges levied by NABARD to you if the failure on your
part.
a. to apply for refinance as per schedule or
b. to get the scheme rephased is due to the failure on your part to draw the loan
instalments from us as per schedule or to advise us to apply for rephasement(s) (in
view of the anticipated delay in the implementation of the schemes) respectively.
j. Events of Default:
In one or more of the following happenings, it would be treated as an event of
default committed by you in terms of this letter of arrangement and legal action
can be taken to recover the loan dues.
a. Any breach of the terms of this Letter of Arrangement;
b. Any one or more instalment(s) are not paid on time;
c. Interest has not been paid on due date;
d. If any information furnished by you to the bank is found to be incorrect or
incomplete in any material particulars.
k. This letter of arrangement shall be read with the hypothecation agreement to be

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executed by you for availing the various loan/facility.


Received a copy of letter
1) Borrower(s)
2) Guarantor(s)
Yours faithfully

BRANCH MANAGER

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