KCC aims to provide short term credit and term loans to farmers for cultivation and other agricultural needs. Key points of the KCC scheme include: - KCC provides revolving cash credit for cultivation expenses, post-harvest storage, consumption needs, and term loans for investments like dairy animals or farm equipment. - Eligible farmers include individuals, tenant farmers, sharecroppers, and joint liability groups. - The limit is set for 5 years based on the scale of finance for expected crops plus escalation, with term loan components repayable over 9 years. - Short term credit is repaid within 12 months while term loans are repaid in installments based on the activity and income generation.

1. Presented by,
ABINASH KR. Mandilwar
CHIEF MANAGER & FACULTY MEMBER
BOI, STAFF TRAINING COLLEGE, BHOPAL

2.  KCC scheme was first introduced
/implemented during the year 1994
 It has been modified on recommendation
of a Working Group under the
chairmanship of by Shri T M Bhasin,
Chairman & Managing, Indian Bank to
review the scheme wef May 12 2012.
 The revised KCC Scheme is to be
Implemented by Commercial Banks,
RRBs and cooperatives.

3. KCC aims to credit support to the farmers for their
cultivation & other needs as indicated below:
a. Short term credit requirements for cultivation of crops
including fodder crops
b. Post harvest expenses
c. Produce marketing loan
d. Consumption requirements of farmer house hold
e. Working capital for Maintenance of farm assets and
allied activities
f. Investment credit requirement for agriculture & allied
activities, pump sets, sprayers dairy animals etc

4.  Farmers – Individuals or Joint
Borrowers.
 Tenant Farmers, Oral Lessees and
Share Croppers.
 SHGs or JLGs of farmers including
tenant farmers, share croppers etc.

5. Type of Facility: Revolving Cash Credit to be
sanctioned where total credits during 12 month period
should be equal or more than the total debits in the
account
Margin: Crop Loan:- No separate margin insisted as
the margin is in Built while fixing of scale of finance
Term Loan:-Up to Rs. 1 lac: NIL, > Rs. 1 lac: 15 -25 %
Security: Hypothecation of crops Up to 1.00 lac & up
to 3.00 lac( under tie up arrangement)
Other case: Mortgage of land
ROI:As per RBI/HO guidelines conveyed from time
to time.

6.  A flexible Limit of Rs. 10,000/- to Rs. 50,000/- as
FLEXI KCC based on the land holding & crop grown
Should include short term credit requirement as
Crop Cultivation, Post Harvest Warehouse Storage,
Other Farm Expenses, Consumption Needs Etc.
AND
Small Term Loan Investments as Purchase of Farm
Equipments, Mini Dairy, Back Yard Poultry Etc.
 Limit to be fixed as per assessment of Branch
Manager without relating it to the value of land.
 Composite KCC Limit : FOR 5 YEARS

7. FOR ALL FARMERS OTHER THAN MF
 Cost of cultivation as per revised scale of finance (Scale of
finance for the crop, as decided by District level Technical
Committee) X Extent of area cultivated
 Add 10% of the limit towards post harvest/household
expenses/consumption needs
 Add 20% towards farm maintenance
 NB:-As per RBI communication Ref No. RPCD:FSD:BC:
71/05.04.02/2013-14 dated 04/12/2013 regarding Interest
Subvention and our Circular Letter No. 2014-15/175 Dt.
06/02/2015 , purpose mentioned at Sr. No. (i) & (ii) only
has to finance under KCC Scheme. Sr. No. (iii) to (vi)
should be finance under Star Tatkal Scheme.
 Total crop loan limit for first year.

8.  Add 10% of first year limit towards cost
escalation/increase in scale of finance-------2
 Add 10% of second year limit towards cost
escalation/increase in scale of finance-------3
 Add 10% of third year limit towards cost
escalation/increase in scale of finance-------4
 Add 10% of fourth year limit towards cost
escalation/increase in scale of finance-------5

9.  Total crop loan limit-------------I
 Add Term Loan component-------II
 Maximum permissible limit/KCC limit=I+II

10. SHORT TERM CREDIT
A. Operation through Branch
B. Operation through Cheque facility
C. With drawl through ATM/ Debit Card
D. Operations through BC and USBs
E. Operation through POS at Sugar Mills/ Contract
Farming Companies. Especially in tie up advances
F. Operation through POS available with input dealers
G. Mobile based transfer transactions at agriculture
input dealers and mandies.

11. Short tem components from
A to E liquidated in 12
months . No need to bring
zero bal. at any point of time.
Term loan component
normally repayable with in 9
years in installments as fixed
based on activity/ income
generation.

12.  Interest subvention for prompt repayment as
advised by GOI/State Govt from time to time.
 Crop Insurance, Assets Insurance available
 PAIS ( Personal Accidental Insurance Scheme) on
payment of premium of agreed ratio between
bank and farmer
 On time documentation for full amount of
aggregate limit.
 Simple declaration about crops raised/proposed
from II year onwards
 No bank’s charges as PPC/DOC etc up to Rs. 3.00
lacs card limit.
 KCC short term limit cum SB a/c, fetch interest
for credit balance at SB interest rate.

13.  Short term crop loan up to Rs. 3,00,000/- at 7% p.a.
 Interest Subvention of 2% p.a. will be available to banks on
the KCC Scheme. As per RBI communication Ref No.
RPCD:FSD:BC:71/05.04.02/2013-14 dated 04/12/2013 and
our Circular Letter No. 2014-15/175 Dt. 06/02/2015 for
computation of Interest subvention on KCC limit, only
following activities are considered.
a) Short term credit requirements for cultivation of crops
b) Post harvest expenses
 Additional Interest subvention @3% will be available to the
prompt paying farmers from the date of disbursement of crop
loan to the actual date of repayment by farmers or up to date
fixed by bank for repayment of crop loan whichever is earlier.

14.  Assumptions :
a) Land holding : 1 acres
b) Cropping pattern :Paddy-1 acres (scale of
finance plus crop insurance per acre :
Rs11000/-)
c) There is no change in cropping pattern for 5
years
Investment /Allied Activities:
I. One non descript Milch Animal (Unit cost:
Rs15,000/-)

15. Sr
N
o
Crop Loan Component Amount
2 Cost of cultivation of 1 acres of Paddy)
Add: 10% towards post harvest/household
expenses/consumption
Add 20% towards farm maintenance
Total Crop Loan Limit for 1st year
Rs. 11000/-
Rs. 1100/-
Rs. 2200/-
Rs 14300/-
3 Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in
scale of finance(10% of 14300/i.e.Rs.1430/- )
Rs. 1430/- +
Rs.15730/-
4 Loan Limit for 3rd year
Add: 10% of the limit towards cost of escalation/increase
in scale of finance (10% of 15730/-i.e.Rs.1573 or 1570/-)
Rs. 1570/-+
Rs.17300/-
5 Loan limit for 4th year
Add: 10% of the limit towards cost of escalation in scale
of finance (10% of 17300/-i.e.Rs.1730/-
Rs. 1730/-+
Rs.19030/--

16. SR NO Crop Loan Amount
6 Loan Limit for 5th year
Add: 10% of the limit towards cost
of escalation in scale of finance
(10% of 19030/-i.e.Rs.1903 or 1900/-)
Rs1900/-+
Rs.19030/- =
Rs.20930/-
Say Rs.21000/- (A)
ii. Term Loan
Component
1st year : cost of 1 Milch animal Rs. 15000/- (B)
Maximum Permissible limit/KCC Limit A+B Rs. 36000/-
Note Drawing limit will be reduced
every year on repayment schedule
of term loan(s) availed and
withdrawals will be allowed up to
the drawing limit.
Application &
documents to be
obtained for full limit
for 5 years. Of course ,
Proposal to be
prepared for full limit .

17.  Assumptions :
a) Land holding : 2 acres
b) Cropping pattern
 Paddy-1 acre (scale of finance plus crop insurance per acre:
Rs11000/-)
 Sugarcane- 1 acre (scale of finance plus crop insurance per
acre: Rs22000/-
c) Investment /Allied Activities:
I. Establishment of 1+1 Dairy Unit in 1st year (unit
cost:Rs20000/- per animal)
II. Replacement of Pump set in 3rd year (unit Cost:Rs.30000/-

18. Sr
No
Crop Loan Component Amount
2 Cost of cultivation of 1 acre of Paddy and 1 acre of
sugarcane ( 11000+22000)
Add: 10% towards post harvest/household
expenses/consumption
Add 20% towards farm maintenance
Total Crop Loan Limit for 1st year
Rs. 33000/-
Rs. 3300/-
Rs. 6600/-
Rs 42900/-
3 Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in
scale of finance(10% of 42900/i.e.Rs.4300/-
Rs. 4300/- +
Rs.47200/-
4 Loan Limit for 3rd year
Add: 10% of the limit towards cost of escalation/increase
in scale of finance (10% of 47200/-i.e.Rs.4700/-
Rs. 4700/-+
Rs.51900/-
5 Loan limit for 4th year Add: 10% of the limit towards cost
of escalation in scale of finance (10% of 51900/-
i.e.Rs.5200/-
Rs. 5200/-+
Rs.57100/--

19. SR NO Crop Loan Amount
6 Loan Limit for 5th year
Add: 10% of the limit towards cost
of escalation in scale of finance
(10% of 57100/-i.e.Rs.5700/0
Rs. 5700/-
Rs.57100/-
Rs.62800/-
Say Rs.63000/- (A)
ii. Term Loan
Component
1st year : cost of 1+1 Dairy Unit
3rd year : Replacement of Pump set
Rs. 40000/-
Rs. 30000/-
Rs. 70000/- (B)
Maximum Permissible limit/KCC Limit A+B Rs. 133000/-
Note Drawing limit will be reduced
every year on repayment schedule
of term loan(s) availed and
withdrawals will be allowed up to
the drawing limit.
Application &
documents to be
obtained for full limit
for 5 years. Of course ,
Proposal to be
prepared for full limit .

20.  Assumptions :
a) Land holding : 10 acres
b) Cropping pattern
 Paddy-5 acres (scale of finance plus crop insurance per acre :
Rs11000/-)
 Followed by groundnut-5 acres (scale of finance plus crop
insurance per acre: Rs10000/-)
 Sugarcane- 5 acres (scale of finance plus crop insurance per
acre: Rs22000/-
c) Investment /Allied Activities:
I. Establishment of 2+2 Dairy Unit in 1st year (Unit
cost:Rs100000/-)
II. Purchase of Tractor in 1st year (unit Cost:Rs.600000/-)

21. Sr
N
o
Crop Loan Component Amount
2 Cost of cultivation of 5 acres of Paddy, 5 acres of
groundnut and 5 acres of sugarcane( 55000+50000+110000)
Add: 10% towards post harvest/household
expenses/consumption
Add 20% towards farm maintenance
Total Crop Loan Limit for 1st year
Rs. 215000/-
Rs. 21500/-
Rs. 43000/-
Rs 279500/-
3 Loan Limit for 2nd year
Add: 10% of the limit towards cost escalation/increase in
scale of finance(10% of 279500/i.e.Rs.27950/- )
Rs. 27950/- +
Rs.307450/-
4 Loan Limit for 3rd year
Add: 10% of the limit towards cost of escalation/increase
in scale of finance (10% of 307450/-i.e.Rs.30750/-)
Rs. 30750/-+
Rs.338200/-
5 Loan limit for 4th year
Add: 10% of the limit towards cost of escalation in scale
of finance (10% of 338200/-i.e.Rs.33800/-
Rs. 33800/-+
Rs.372000/--

22. SR NO Crop Loan Amount
6 Loan Limit for 5th year
Add: 10% of the limit towards cost
of escalation in scale of finance
(10% of 372000/-i.e.Rs.37200/-)
Rs. 37200/-+
Rs.372000/- =
Rs.409200/-
Say Rs.409000/- (A)
ii. Term Loan
Component
1st year : cost of 2+2 Dairy Unit
Purchase of Tractor
Rs. 100000/-
Rs. 600000/-
Rs. 700000/- (B)
Maximum Permissible limit/KCC Limit A+B Rs. 1109000/-
Note Drawing limit will be reduced
every year on repayment schedule
of term loan(s) availed and
withdrawals will be allowed up to
the drawing limit.
Application &
documents to be
obtained for full limit
for 5 years. Of course ,
Proposal to be
prepared for full limit .

23. For new advances
Other Components (Produce Marketing Loan, Working
Capital for allied activities/ farm machineries,
consumption limit) to be financed under other schemes
as KISAN TATKAL SCHEME.
For existing KCCs
 Review accounts either by absorbing these other
components against possible increase in Scale of finance
OR
 Delete these limits from existing KCC accounts and
consider financing the same under other agriculture
schemes as Kisan Tatkal Loan Scheme etc.