Union Finance Minister in his budget speech for the year 1998-99 had desired
that the banks should issue Kiss an Credit Cards to farmers on the basis of
their land holdings so that the farmers may use for ready purchase of
agricultural inputs such as seeds, fertilizers, pesticides, etc. and draw cash
for their production needs NABARD was asked to formulate a model scheme in this
regard for uniform adoption by banks.
Accordingly, NABARD has since formulated a model Kisan Credit Card Scheme in
consultation with major banks. The Scheme has been recommended to banks for
adoption. The salient features of the scheme are as under:
(i) Kisan Credit Card Scheme aims at adequate and timely support from the
banking system to the farmers for their cultivation needs including purchase
of inputs in a flexible and cost effective manner. The scheme is to be
implemented by commercial banks, RRBs and Co-operative Banks.
(ii) The scheme would primarily cater to the short term
requirements of the farmers. Under the scheme banks may provide the Kisan
Credit Card to farmers who are eligible for production credit of Rs. 5,000/-
and above. The credit extended under the KCC Scheme would be in the nature of a
revolving cash credit and provide for any number of drawals and repayments
within the limit.
(iii) While fixing the limit, the bank may take into account the
entire production credit requirements of the farmer for the full year including
the credit requirements of the farmer for the ancillary activities related to
crop production such as maintenance of agricultural machinery/implements,
electricity charges, etc.
(iv) The Credit Card should normally be valid for 3 years subject
to an annual review. The credit limit under the card will be fixed on the basis
of the operational land holding, cropping pattern and scales of finance as recommended
by the District Level Technical Committee (DLTC)/State Level Technical
Committee (SLTC).
(v) Banks may apply the same rates of interest as are applicable to
crop loans and the security/margin norms, etc. should be in conformity with the
instructions issued by RBI/NABARD from time to time.
(vi) The KCC facility being in the nature of cash credit
accommodation for agricultural purposes, the prudential norms as applicable to
such facilities would apply to KCC accounts.
Repayment
The amount drawn or utilised against the card should be repaid to the bank
by the farmers within 12 months of drawal of money.
Progress of the Scheme
As in March 1999, a total of 7, 83,000 KCC cards with credit facility
covering a sum of Rs. 2310 crore have been insured by all banks to farmers
throughout India. The banks are fast popularizing the scheme among farmers.
Credit card scheme is still in its infancy, in India. It is now for the bank
managements to seize the opportunities offered by the huge populace and growing
number of working class/fixed income earners. The Bank cards are, however,
becoming popular in India.
Various banks have introduced credit cards either jointly with other banks
or independently. For example, Bank of Baroda has introduced its credit card known
as "BOBCARD". Similarly Central Bank of India has introduced
"Central Card" and State Bank of India, the 'SBI Card'.
It may also be told that as per current income tax regulations all persons
holding credit cards must file their annual income tax returns.
A Debit card is a card that has direct access to our bank account. The card
is issued by our bank. Whenever we use our debit card, our bank account is
debited immediately. Unlike credit cards, we don't enjoy any credit period and
therefore the debit card does not have minimum income eligibility criteria.
There are two types of debit cards and two types of debit card transactions:
1. 'Direct' debit cards allow only "on-line" transactions. An
immediate electronic transfer of money from our bank account to the merchant's
account. This requires us to enter our PIN or Personal Identification Number at
the store's terminal.
The system then checks our account for sufficient funds to cover the
purchase. These are typically the cards that come with the "Maestro"
logo, from Mastercard. An example is the Suvidha debit card issued by Citibank
in select cities.
2. A 'Deferred' debit card looks similar to a credit card, but is not a
credit card. It bears a Visa or MasterCard logo, and can be used wherever our
card's brand name is displayed.
This card allows "off-line" and "on-line" transactions.
Offline purchases are where the shopkeeper's terminal scans our card and
creates a debit against our account.
We are not required to enter our PIN at the store's terminal. Most off-line
transactions are verified immediately to see whether there is enough money in
our account. Off-line debit cards usually carry the 'Electron' logo, from Visa.
HDFC Bank issues Electron debit cards in more than 15 cities around the
country.
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