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PUNJAB NATIONAL BANK PRIORITY SECTOR & LEAD BANK DIVISION AGRICULTURE CELL H.O. ATMA RAM HOUSE, 1 TOLSTOY MARG, NEW DELHI. Phone No.23350240, 23350419;fax no.23359558; email ID firstname.lastname@example.org Date: 08.10.2011 TO ALL OFFICES In supersession of following Farm Credit Circulars: Circular No. Date Circular No. Date
Codified 13 11.01.200 8 7 15 52 25.03.200 43 8 16.07.200 73
26.02.200 8 08.06.200 9 12.10.200
9 78 09.11.200 37 9
9 27.09.201 0
CODIFIED FARM CREDIT CIRCULAR NO. 17 /11 REG: SCHEME FOR FINANCING UNDER PNB KISAN CARD (KCC). Detailed guidelines regarding PNB Krishi Card Scheme were circulated to all Offices vide Codified Farm Credit Circular No.13/2007 dated 11.01.2007 followed by several other circulars issued from time to time. As per existing system, the farmer is to execute fresh document for enhancement of KCC limit and charge has to be created afresh for the enhanced portion with the revenue authorities. This takes lot of time. Further, we enhanced the maximum limit of KCC from Rs 10 Lakh to Rs 20 Lakh for our existing borrowers having satisfactory dealing with the bank for the last two years. However, the consumption loan limit continues to be at a maximum of Rs 50,000/-.
After examining the KCC guidelines of other banks, suggestions received from the field and in order to further simplify our scheme following modifications have been made in the KCC Scheme:I. Maximum Consumption loan limit has been increased from maximum of Rs.50,000/- to Rs one lakh or 25% of the limit, whichever is lower. II. Allow fixation of limit for crop production/working capital limit for allied activities at 50% higher than the eligible limit as on the date of sanction. However, based on the farmers actual requirements, upto maximum eligibility (calculated on the basis of latest scale of finance, etc.) operative limit may be fixed for every year. To quote farmer having credit eligibility of say Rs.1,00,000/- may be actually sanctioned a limit of Rs 1,50,000/- with operative limt of say Rs 1,00,000/- in the first year, Rs.1,10,000/- in the 2nd year, Rs.1,20,000 in the third year and so on. Normally the inflation ranges between 8-10% & therefore enhancement in the operative Limit may also be upto 10%. However, the percentage of enhancement in the operative limit may not be fixed and it may vary each year proportionate to
increase in the scale of finance of that particular area. In specific cases if the actual credit eligibility as per Banks guidelines exceeds the proposed 50% enhancement, Incumbents will be free to sanction higher limit after obtaining fresh documents with proper justifications like increase in scale of finance, change in cropping pattern, increase in land holding (owned/leased), etc,. III. No margin is required upto limit of Rs. 3 lakh (earlier it was Rs. 2 lakh). IV. Instead of present system of four types of Kisan Credit Cards (security items), it has been decided to use single card which will be a non-security item. Further, nomenclature of the card has been changed as PNB Kisan Card. However, branches may continue to use the existing card till the stock is exhausted and the new cards are supplied by Printing & Stationary Department. V. The limit of Rs. 50000/- for granting relief against indebtedness due to borrowing from non institutional lenders has already been increased to Rs. 1 lakh under PNB Krishak Sathi
Scheme. Therefore, the credit facility to redeem the outstanding dues of money lenders may be covered only under PNB Krishak Sathi Scheme.
Guidelines on the captioned scheme have been consolidated by subsuming the operative part of subsequently issued circulars as per Annexure. Incumbent Incharge of the branches are advised to adhere to guidelines contained in scheme for financing under PNB Kisan Card and boost agriculture advances.
General Manager Encl: As above Annexure to Codified Farm Credit Circular No. 17 /11 dated 08.10.2011 REG: SCHEME FOR FINANCING UNDER PNB KISAN CARD (KCC).
Progressive literate and illiterate farmers who are owner cultivators, tenants, lessee or allottee farmers with recorded occupancy rights or farmers with ancestral/perpetual rights of cultivation, Joint Liability Groups (JLGs). Oral tenants can be eligible for loan only if land owners agree to become co-borrowers. In the accounts which are secured by liquid securities like FDR, NSC/KVP, etc., the cards to oral tenants can be issued without stipulating the condition of land owners to be made coborrowers. Landless labourers, share croppers, tenant farmers and oral lessees can be issued PNB Kisan Card (KCC) upto limit of Rs 50,000/on the basis of an Affidavit, duly stamped as per the respective State Stamps rules. Farmers should have stable financial position and a good banking habit. In case of existing borrowers, track record of repayment is to be taken into account. Identification of the farmers will be done on the basis of photograph of borrowers along with signatures in case of literate borrowers and in case of illiterate borrowers; he shall be
identified by his photo and thumb impressions. He shall put his thumb impressions in the presence of the Incumbent Incharge. Literate farmers will put signatures and illiterate farmers will put thumb impressions on the card which will be authenticated by the Incumbent Incharge of the branch and the card will be laminated. After obtaining prior permission of the Circle Head, PNB Kisan Card can be issued to the staff members also, provided he/she is a cultivator owner of the requisite land holding and is residing at a place from where he/she can conveniently undertake/supervise all agriculture operations and sanctioning authority is satisfied in this regard. 2. PURPOSE OF THE LIMIT:
Purpose of the loan would cover short term working capital for agriculture activities, other domestic requirements such as education, consumable items, medical expenses, etc.,term credit needs of the farmers. For consumption needs, loan may be sanctioned upto 25% of the limit or Rs. one lakh, whichever is lower. Thus the limit may be set up in such a way that the consumption loan portion should be maximum 1/4th and remaining 3/4th should be for
productive purposes. To quote if the credit requirement of farmer for crop loan/allied activities/term loan is arrived at Rs 1,50,000/-, then the consumption loan will be allowed upto maximum of Rs 50,000/- (1/3rd of the productive limit) and the total limit will be Rs 2,00,000/- . Thus the consumption loan will be restricted upto 25% of the total limit. Borrowers can avail limits either under PNB Kisan Card Scheme or Kisan Ichchhapurti Yojana or Kisan Sampuran Rin Yojana. But borrower can avail limit under only one of the three schemes, as per applicable terms and conditions of the respective scheme. 3. EXTENT OF LIMIT:
Maximum Rs.10 lakh (Rs.20 lakh for existing borrower farmers having satisfactory track record of minimum 2 years). 4. FIXATION OF LIMIT:
Limit may be fixed for term loan and working capital requirement limit for agricultural and allied activities, etc., based on the scale of finance/unit cost of the asset/s proposed to be acquired by the farmer, the allied activities already being undertaken on the farm, the Incumbents judgment on his repaying capacity vis--vis total loan burden devolving on the farmer, including his existing loan obligations. While sanctioning the limit under such cases, the Incumbent Incharge will have to certify the approved scale of finance/unit cost for activities mentioned in each and every proposal. A copy of the approved scale of finance/unit cost should also be kept on banks record. Further, Incumbents Incharge may disburse credit in accordance with actual costs involved in cases where farmers adopt scientific/advanced methods of cultivation using modern technology, hybrid seeds, etc. The limit for the individual farmer may be worked out on the basis of total agriculture income stream of the farmer. To assess income from farm activities, extent of land holding, cropping pattern, acreage and average yield of each crop grown, price realisation, etc., are to be examined. For this purpose, the branch should
obtain revenue records i.e. Fard Zamabandi & Khasra Girdawari of the farmer to verify the details noted therein. The revenue records should not be older than 9 months. Price realisation may be ascertained by either the Government fixed minimum support price or local price, whichever is lower. The limit is to be fixed taking into account the total requirement of the farmer on annual basis for growing crops round the year as also the other production credit needs for allied agricultural activities such as dairy, poultry, etc., other domestic needs and investment needs of the farmers. Total limit sanctioned to farmers should have a relationship with the projected net earning and the repaying capacity of the borrower. Bifurcation of limit: Maximum Rs 5 lakh (Rs.10 lakh for existing borrower farmers having satisfactory track record of minimum 2 years) 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 ((Rs.20 lakh for existing borrower farmers having satisfactory track record of minimum 2 years) including cash credit limit mentioned above. Since the limit may be fixed by taking into account the requirement of the farmer on annual basis for all farm activities and there is no restriction on number of transactions in the cash credit account; the farmer can avail loan for the next crop before liquidation of the existing dues. Staggered Limit: Branches may fix limit for crop production/working capital for allied activities at 50% higher than the limit arrived as per the above guidelines. However, based on the farmers act