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The Reserve Bank of India (RBI) has asked commercial banks, regional rural banks and cooperative banks to issue smart cards/ debit cards to farmers under the revised Kisan Credit Card (KCC) scheme so that they can access credit with ease.
These cards should be compatible for use in the ATMs, hand-held swipe machines, point of sale (PoS) terminals and mobile banking and be capable of storing, among others, adequate information on farmers identity, assets, land holdings and credit profile.
Using the cards, farmers can access credit from ATMs and PoS terminals directly to meet their immediate operational requirements. This move comes as a need was felt to align the KCC scheme to current requirements, said a RBI circular.
The RBI has announced a new KCC scheme based on the recommendations of a working group headed by Mr T.M. Bhasin, Chairman and Managing Director, Indian Bank.
Credit limit
The RBI circular on the revised KCC scheme says that while there will be no limit on the number of debit or credit transactions, each card will have a credit limit.
Every time money is drawn using the card, it has to be repaid within a period of 12 months, based on which the future credit limit and validity will be adjusted. For long term loans the repayment period is up to five years. It, however, leaves the rate of interest (linked to base rate) and margin to the banks discretion.
The RBI has told banks to keep the KCC holder informed of the different insurance options and obtain his/ her consent at the application stage itself. The premium for the insurance will be paid from the KCC accounts.
In addition, farmers can also transact through PoS machines held by business correspondents, input dealers, traders and mandies, the circular said.
> satyanarayan.iyer@thehindu.co.in
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