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|||`|| |`|-||-| || |||||| |`|-|||||| ||`| || ||-||-| |`|||| ||-||;Department of Economic Analysis and ResearchNational Bank for Agriculture and Rural DevelopmentMumbai2010||-||`|| |`||| - 52Occasional Paper - 52efkemeeve esef[ kee[& - Ske DeOeeveKisan Credit Card - A Study+|-|| +||-|--||Samir Samantarae| e||+|-|| +||-|--|||r||| -|r|-||||;| |`||| | =|`--||`=|-| -|| || ||-| |||| -|=|| | r, ||| || ;|| |`-|| |`|--|:| |r| rThe usual disclaimer about the responsibility of the National Bank for Agriculture andRural Development as to the facts cited and views expressed in the paper is implied.||| ||`| || |||`-|-| |`|||| ||, |||`|| |`|-||-| || |||||| |`|-|||, |||| -||`|-|, || |`||,--||c |. || -24 || -||| -||. |||| |.8121 ||;|-|-|| ||--|-|||, ||;| (-||), -||; - 400 051|| -||||`|-|.Published by the National Bank for Agriculture and Rural Development Department ofEconomic Analysis and Research 4th Floor, C Wing, Plot No. C-24, G-Block, PB No.8121, Bandra-Kurla Complex, Bandra (East) Mumbai - 400 051|||c| |||`||| -||, -||c, -||; - 400 001 || -||`;-|.Printed at Karnatak Orion Press, Fort, Mumbai-400 001.Tel.: 22048843 / 22044578 Mobile : 9833239403iiAuthorSamir SamantaraAssistant General Manager|e|| ||`-| || t|||`-|| |`|||+| -|||||`|| |`|-||-| || |||||| |`|-|||,|||| -||`|-|, || |`||, --||c |. ||-24|| -||| -||. |||| |.8121|| ;|-| -|| || --|-| | |, || ;| (-| | ),-||; - 400 051National Bank for Agriculture andRural DevelopmentDepartment of Economic Analysis and Research4th Floor, C Wing, Plot No. C-24,G-Block, PB No. 8121,Bandra-Kurla Complex, Bandra (East)Mumbai - 400 051ForewordAgricultural Credit Delivery System (ACDS) has evolved into a multi-product and multi-agency approach (MPMAA). However, experienceover preceding few decades suggested that multi-credit productapproach (MCPA) has a number of systemic and structural rigidities,turning most of the credit products inefficient and sub-optimal. Theintroduction of a new credit product called Kisan Credit Card (KCC)in 1998-99 with three different sub-limits viz. production, assetsmaintenance and consumption needs is a step in this direction toaddress the challenge. In order to assess the implementation aspectsof KCC scheme after almost a decade of its introduction, it was feltby NABARD to critically examine the difficulties and operationalproblems / bottlenecks encountered by the farmers as well as theimplementing agencies.NABARD conducted a study covering 14 States, 178 bank branchesand 1876 KCC holders. The study brings out the fact that in thecurrent Management Information System (MIS), there is no mechanismto eliminate distortions in the form of multiplicity of cards, invalidcards, etc. for recording of genuine KCC holders in any of the RuralFinancial Institutions (RFIs). Suggestions from farmers included useof KCC as cash-credit card, minimal documentation, flexibility inrepayments, dispensation of seasonal limits, creation of awarenessabout KCC, etc.The study has further suggested that there is a need to adopt MissionMode approach to make KCC into a farmers friendly efficientinstrument for effective credit delivery system accompanied byappropriate institutional mechanism. I am sure that the study findingswill be useful to bankers, academicians, policy makers anddevelopment administrators in initiating follow-up actions.National Bank for Agriculture (Umesh Chandra Sarangi)and Rural Development ChairmanMumbai06 April 2010iiiAcknowledgementsThe author sincerely records its obligation to Dr. A. K. Bandyopadhyay,Chief General Manager, Department of Economic Analysis andResearch (DEAR), for his continuous encouragement and suggestionsand guidance in various fora, which helped the author to enrich thecontents of the report.The author gratefully acknowledges the guidance and the valuableinputs provided by Dr. G D Banerjee, General Manager (Retd.),Shri B. Jayaraman, General Manager, Shri S. S. Bhave, DeputyGeneral Manager, NABARD, HO.The author also makes special mention of Shri K. C Badatya, ShriNirupam Mehrotra, and Dr. B. B. Sahoo, Assistant General Managersfor their useful suggestions and comments.The author is grateful to team of officers from fourteen Regional Office,NABARD for required inputs(state-specific reports) in consolidating thereport.The author is also gratefully acknowledgei) the valuable inputs and insights offered by officers fromProduction Credit Department, HO.ii) all the sample KCC farmers, non-KCC farmers, tenant farmersand officials from different bank branches/PACS who cooperatedwith the study.However, the views expressed in the study report are of the authorsalone.AuthorivAbbreviationsADWDR : Agriculture Debt Waiver and Debt Relief SchemeACDS : Agricultural Credit Delivery SystemAPC : Agricultural Production CommissionerATM : Automatic Teller MachineBDO : Block Development OfficerCBs : Commercial BanksCEOs : Chief Executive OfficersCoC : Cost of CultivationDCCB : District Central Cooperative BankDDM : District Development ManagerDEAR : Department of Economic Analysis & ResearchDLRC : District Level Review CommitteeDLTC : District Level Technical CommitteeEC : Encumbrance certificateFIF : Financial Inclusion FundFTTF : Farmers' Technology Transfer FundGDP : Gross Domestic ProductGOI : Government of IndiaICDM : Innovative Credit Delivery MechanismICIs : Innovative Credit InterventionsIMBP : Individual Maximum Borrowing PowerJLGs : Joint Liability GroupsKCC : Kisan Credit CardKGC : Kisan Gold CardLDM : Lead District ManagerMCPA : Multi-Credit Product ApproachMPMAA : Multi-Product and Multi-Agency ApproachMRO : Mandal Revenue OfficerNABARD : National Bank for Agriculture and Rural DevelopmentNAFSCOB : National Federation of State Cooperative BanksNAIS : National Agriculture Insurance SchemeNFS : Non-Farm SectorNPAs : Non Performing AssetsPACS : Primary Agricultural Cooperative SocietyPAIS : Personal Accident Insurance SchemePCD : Production Credit DepartmentvPLPs : Potential Linked Credit PlansPPB : Patadar Pass BookRBI : Reserve Bank of IndiaRCCF : Revolving Cash Credit FacilityRKBY : Rashtriya Krishi Bima YojanaRRB : Regional Rural BankSAOs : Seasonal Agricultural OperationsSCB : State Cooperative BankSFP : State Focus PaperSHGs : Self Help GroupsSLBC : State Level Bankers CommitteeSLCC : State Level Coordination CommitteeSLCC : State Level Technical CommitteeSLMRC : State Level Monitoring and Review CommitteeToR : Terms of ReferenceVoP : Value of ProductionVRO : Village Revenue OfficerAbbreviations Contd.viForeword......................................................................................iiiAcknowledgements ....................................................................... ivAbbreviations ...................................................................... vList of Tables.............................................................................. viiiList of Figures .............................................................................. ixExecutive Summary ..................................................................... xiCHAPTER IAn Overview................................................................................. 1Agricultural Credit Delivery Strategy ............................................ 3Kisan Credit Cards....................................................................... 5CHAPTER IISample Design and Methodology ................................................... 8Selection of Banking Agencies and Sample .................................. 10Data Collection and Analysis ....................................................... 12Factors determining Credit Requirements.................................... 12CHAPTER IIIReview and Progress of Kisan Credit Cards ................................. 15Progress of Kisan Credit Card Scheme in India ............................ 16Coverage of Small/Marginal Farmers .......................................... 19Monitoring Arrangement under KCC ........................................... 20CHAPTER IVImplementation of Kisan Credit Card Scheme ............................... 21Implementation Aspects of the KCC Scheme................................ 21Types of KCCs Issued ..................................................................26Repayments and NPA Norms under KCC ..................................... 28CHAPTER VEffectiveness of KCC .................................................................. 31Coverage of New farmers ............................................................. 32Adequacy of Credit ......................................................................33Overall Efficacy/Benefits of KCC ................................................. 42CHAPTER VIImpact of KCC and Cost of Credit ............................................... 43Productivity of Crops ...................................................................43Cost of Credit ..............................................................................44Opportunity Cost of the time spent.............................................. 46Results and Discussion of Regression Models .............................. 48CHAPTER VIIKisan Credit Cards - Issues and Constraints ............................... 54CONTENTSviiNo. Title Page No.viiiLIST OF TABLESNo. Title Page No.Table 2.1 Sample Distribution - Bank branches and Farmers ......................... 11Table 2.2 Farmers covered during the study (agency-wise) .............................. 14Table 3.1 Agency-wise and Period-wise progress of KCC.............................

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