- Agriculture is the mainstay of India's economy, with over 60% of people dependent on it for livelihood, though it contributes less than 27% to GDP.
- The Kisan Credit Card (KCC) scheme was introduced in 1998 to provide timely and adequate credit to farmers in a cost-effective way. It aimed to address issues in accessing and providing agricultural credit.
- Performance has varied by state and region. States like Andhra Pradesh, Maharashtra, Rajasthan, Orissa, Karnataka and Gujarat have issued over 500,000 cards each. The South and West zones have covered over 25% of farmers each with KCCs, while coverage is lower in the North
- Agriculture is the mainstay of India's economy, with over 60% of people dependent on it for livelihood, though it contributes less than 27% to GDP.
- The Kisan Credit Card (KCC) scheme was introduced in 1998 to provide timely and adequate credit to farmers in a cost-effective way. It aimed to address issues in accessing and providing agricultural credit.
- Performance has varied by state and region. States like Andhra Pradesh, Maharashtra, Rajasthan, Orissa, Karnataka and Gujarat have issued over 500,000 cards each. The South and West zones have covered over 25% of farmers each with KCCs, while coverage is lower in the North
- Agriculture is the mainstay of India's economy, with over 60% of people dependent on it for livelihood, though it contributes less than 27% to GDP.
- The Kisan Credit Card (KCC) scheme was introduced in 1998 to provide timely and adequate credit to farmers in a cost-effective way. It aimed to address issues in accessing and providing agricultural credit.
- Performance has varied by state and region. States like Andhra Pradesh, Maharashtra, Rajasthan, Orissa, Karnataka and Gujarat have issued over 500,000 cards each. The South and West zones have covered over 25% of farmers each with KCCs, while coverage is lower in the North
- Agriculture is the mainstay of India's economy, with over 60% of people dependent on it for livelihood, though it contributes less than 27% to GDP.
- The Kisan Credit Card (KCC) scheme was introduced in 1998 to provide timely and adequate credit to farmers in a cost-effective way. It aimed to address issues in accessing and providing agricultural credit.
- Performance has varied by state and region. States like Andhra Pradesh, Maharashtra, Rajasthan, Orissa, Karnataka and Gujarat have issued over 500,000 cards each. The South and West zones have covered over 25% of farmers each with KCCs, while coverage is lower in the North
Shodh, Samiksha aur Mulyankan (International Research Journal)ISSN-0974-2832 Vol.
II, Issue-7 (August 2009)
201 Agriculture lias been the mainstay of our economy. More than 60% of our people depend upon agricul-ture for their livelihood even though contribution of agriculture to our Gross Domestic Product (GDP) is less than 27%. 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 a way of life, a tradition, which for centuries thus runs the opening sentence of the agricultural policy has shaped the thought, the outlook, the culture and the economic life of the people. Agriculture will continue to be cen-tral to all the strategies for socio-economic development of the coun-try. Rapid growth of agriculture 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. The quantum of agricultural credit provided by the banking system (co-operative banks, commercial banks and regional ru-ral banks) increased from Rs. 31,956 crores in 1997- 98 to Rs. 36897 crores in 1998-99. it has further increased to Rs. 41,764 crores in 1999-2000. While this is quite impressive con-sidering the overall bank credit for priority sector, credit for farm sec-tor is not without its share of problems: viz. problems in access-ing credit for the agriculturist and problems in dispensing credit by the bank. 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 mea-sures for improving the delivery systems as well as simplification of procedures for agricultural credit. Against this background the Kisan Credit Card (KCC) scheme was introduced in pursuance to the announcement made by the honble finance minister in his bud get speech for Ihe year 98-99. It sought to address many of the issues concern-ing short-term credit needs of farm-ers. It aimed at providing timely and adequate credit to the farmers in a cost effective and flexible man-ner. 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. With an in-built component for life insurance from the current year the scheme is to substitute all other existing modes of short-term credit delivery. Objectives of the present study-1.To study the features of Kisan credit card scheme launched by RKIJs, commercial banks and co-operative banks. 2. To study agency wise performance of Kisan credit cards. 3. To analyse state-wise performance of co- operatives and camercial banks in terms of issuing 4. To study zone wise coverage of KCC in terms of percentage of total holdings. Features of the Kisan Credit Card (KCC) Scheme-Eligible farmers are lo be provided with a Kisan Credit Card and a pass book or card-cum-pass book. Re-volving cash credit facility involv-ing any number of drawals and repayments within the limits. Limit to be fixed on the basis of opera-tional land holding, cropping pal-tern and scale of finance. Entire production credit needs for full year plus ancillary activities related to crop production to be considered while fixing limit. Sub-limits may be fixed at the discretion of banks. Card valid for 3 years subject to annual review. As incentive for good performance, credit limits could be enhanced to take care of increase in costs, change in crop-ping pattern, etc. Each drawal to be repaid within a maximum period of 12 months. Conversion reschedulement of loans also permissible in case of damage to crops due to natural calamities. Security, margin, rate of interest, etc. as per RBI norms. Operations may be through issuing branch (and also PACS in the case of Cooperative Banks) through other designated branches at the discre-tion of bank. Withdrawals through slips/cheques accompanied by card and passbook. Benefits of scheme to the Banks-Reduction in work load for branch staff hy avoidance of repeat ap-praisal and processing of loan pa-pers under Kisan Credit Card Scheme. Minimum paper work and simplification of documentation for drawal of funds from the bank. Improvement in recycling of funds and ROAL OF KISAN CREDIT CARDS IN THE BENEFIT OF SMALL FARMERS * Dr. Balaji Kamble * Head Dept. of Economics, Dr. Babasaheb Ambedkar Mahavidyalaya, Latur ||. i|| | -| :--|zi || (l||`ISSN-0974-2832,Vol. II, Issue-7 (August 2009) 202 belter recovery of loans. Re-duction in transaction cost to the banks. Better Banker - Client rela-tionships. i. Critical review of the bank-wise / agency-wise / geographical /one-wise / state-wise / farmers category- wise progress of the scheme (issue of cards) and identification of the bottlenecks in the progress of the scheme, if any. ii. Analyse and study the disbursement of loans and volume of turnover under KCC scheme and its impact on flow of credit to agricultural sector and futuristic trends. iii. Highlight efficacy of the scheme with particular reference to operational problems / constraints and suggest improvement in the present system. A summary position is given in the table 1.-As could be seen in certain states a large number of cards have been issued while in a few others the number had been very small. A comparison of target versus achievement is not possible, as the targets for the commercial banks are not available statewise. However, on a closer scrutiny of the number of cards issued, it can be inferred that in certain states, the number of cards issued is quite significant (more than 5 lakh.) These states are Andra Pradesh, Maharashtra, Rajasthan, Orissa, Karnalaka, Gujarat and Uttar Pradesh. In absence of target, another yardstick to compare the perfor-mance of banks in issuing kisan cards could be measuring the per-formance of banks by number of kisan cards issued. This may be done by comparing the number of ki.san card issued with the number of farmers borrowing from banks in each state. The number of farmers borrowing from banks has been calculated by assuming that 50% of the operational holding as borrow-ing farmers. Detailed statewise po-sition of kisan cards issued alongwith operational holding and per cent of farmers covered by kisan cards in each has been shown in the table 2. However, a summary position has been shown in the table 3.As can be observed from the table, only Andhra Pradesh has covered more than 50% of its farm-ers (61.2%). The performance of states like Gujarat, Haryana, Orissa, Maharashtra, Rajasthan and Punjab may be regarded as moderate. In the remaining states, banks have to cover a lot of farmers under the scheme. They may have to make all out efforts to bring in more number of new farmers hitherto not having access to banks, into the banking fold using kisan card. Zonewise review of performance-Various states of the country have been clubbed into 5 geographical zones viz., Western Zone, South Zone, North Zone, North-Has tern Zone and Eastern Zone. The posi-tion in respect of kisan card issued in various zones has been As could be observed from the table, the progress in South Zone and West zone had been good as in these two zones, 30.7% and 26.7% of the farmers accessing bank credit have been covered under the kisan card scheme. Progress of North Zone is poor as Co-operative Banks performance has not been upto mark. Punjab State Co-operative Bank had delayed the implementa-tion of the kisan card owing to certain reservations and apprehen-sions. It is learnt that the authorities in NABARD, Chandigarh and Punjab State Co-operative Bank, Chandigarh have later on clarified these apprehensions and fears have been cleared and that necessary intimation in this regard have been issued by Registrar, Co-operative Societies, Govl. of Punjab. It is, therefore, expected that by the end of the year i.e. 31 March 2001, all Co-operative banks in Punjab would achieve their targets of issuing 175000 cards during the year 2000-01. This would push up the perfor-mance of north zone. The real cause of worry is the very poor progress in North-East-ern /one and Eastern Zone. The matter should be given urgent at-tention by the concerned state gov-ernment and also by the apex agen-cies including Reserve Bank of In-dia and NABARD. The problem, if any, may be discussed in the meet-ing of State Level Bankers Commit-tee. Il may be mentioned that the progress of Kisan Cards had been good in those states where state governments took interest and fol-lowing up the scheme with the banks. Conclusions-1.Kisan credit cards is one of the most innovative, widely ac-cepted, highly appreciated and non-discriminatory banking products. 2. RRBs had issued 4.05 lakh cards and achieving 81.2 per cent of the annual target, 3. Commercial banks and co-opera- lives target was very high com-pared to RRBs but these banks achieved 56.0 per cent and 46.1 per cent respectively. 4. While considering statewise per-formance of RRBs, 12 states per-formance was excellent and these states achieved the target more than 80 per cent. The states are Arunachal Pradesh, Bihar, Gujarat, Himachal Pradesh, Jammu & Kashmir, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Tripura and Uttar Pradesh. 5. In co- operative banks few states performed well. The states are Bihar, Haryana, Karnataka, Maharashtra and Utter Shodh, Samiksha aur Mulyankan (International Research Journal)ISSN-0974-2832 Vol. II, Issue-7 (August 2009) 203 Pradesh. 6. Southern states performance of RRBs and Co-operatives in issu-ing credit cards is very poor ex-cept Karnataka state. 7. Commercial banks had issued 35.7 lakhs cards involving sanc-tion of Rs. 9148.4 crores to differ-ent categories of farmers. Among the 27 commercial banks, Canara Bank, State Bank of India and Syndicate Bank performance is good and these banks issued more than 3.0 lakh Kisan credit cards. 8. In southern states, Karnataka state performed well in terms of issuing Kisan credit cards. 9. In zone wise performance in terms of coverage of holdings, west zone and south zone perfor-mance is excellent. 10. The researcher observed that Kisan credit card within short span of time has established itself as a fairly popular credit among the farming community. It is ex-pected that this would help the farmers in easy and timely access to much desired institutional credit and the KC card has been appreciated and accepted both by the bankers as well as farmers. Suggestions- 1. KCC also envisaged meeting the short term credit need of the farm-ers for purposes other than rais-ing the crops. Most of the coop-erative banks had not been pro-viding for it while sanctioning the credit limit to farmers under kisan card. Perhaps this could be due to the fact that NABARD refi-nance for seasonal agricultural operations only covers loans to crops and other portion has to be met out of their own resources by the Co-operative banks. The weak resource position of many Co-operative banks did not permit this. This is a policy issue deserv-ing consideration by NABARD as also by RBI. It may be possible for NABARD to provide refinance against non-crop component also, if RBI sanctions additional credit limit to cover the other short term needs to NABARD, while sanc-tioning credit line for seasonal agricultural operations. 2. The banks should concentrate more on poor performing zones in terms of coverage of holdings such as north zone, north eastern zone and eastern zone. There the institutions should increase the is-sue of Kisan credit cards. 3. Commercial banks and co-opera-tives banks branches are very high in all states. So the banks can cover more areas and can issue more kisan credit cards with the help of wide propaganda. ||. i|| | -| :--|zi || (l||`ISSN-0974-2832,Vol. II, Issue-7 (August 2009) 204 REFERENCES 1. A study of Financial Markets, Volume 5: INDIA. Manila: Asian Development Bank. 2. IES (2002) Economic Survey, 2002, New Delhi: Ministry of Finance, Government of India. 3. NABARD (2001) Regional Rural Banks- Key Statistic, 31 March 2001, Mumbai. 4. NABARD (2002) Review of the Performance of RRB sason 31 March 2002', Mumbai. 5. National Bank for Agriculture and Rural Development, RBI (2002a) Report on trends in the Indian Banking Sector, November 2002, Mumbai. 6. Reserve Bank of India RBI (2001) Basic Statistical Returns, March 2001, Mumbai, Reserve Bank of India. 7. Reserve Bank of India RBI (2002) Master Circular, Rural Planning and Credit Department, 11 November 2002, Mumbai.
Financial Inclusion for Micro, Small, and Medium Enterprises in Kazakhstan: ADB Support for Regional Cooperation and Integration across Asia and the Pacific during Unprecedented Challenge and Change