5
exercise only in quite a good number of cases as actual KCC limit fixed used to
differ (normally less) from the value arrived at after taking into account the above
components.
Season-wise sub limit
19. Season-wise crop loan limit was found to be practiced by cooperative banks in
all the states selected for the study. This is normally done because of resource
crunch at the DCCB level as well as to ensure better recovery by the farmers.
Personal Accident Insurance Scheme (PAIS)
20. It was reported by the bank branches visited in Assam, Bihar, UP and Punjab
states that they had covered almost all the loanee borrowers under PAIS, but in
Maharashtra, extent of coverage under PAIS was varying from bank to bank.
Crop Insurance Scheme
21. The crop insurance scheme is being implemented in all the states covered in the
present study except Punjab. It was observed that many illiterate farmers did not
have much knowledge about the PAIS and crop insurance scheme. In fact, most
of the time bankers debit the premium amount towards PAIS and crop insurance
without the knowledge of the farmers.
Quantum of KCC loan
22. A huge difference was observed in the quantum of KCC limit sanctioned to farmers
across the sample states. The average amount of loan sanctioned per borrower
was varying from Rs 38,618 in case of Assam to Rs. 483,406 in case of Punjab.
The minimum amount of KCC loan was varying from Rs. 5,000 in Bihar to Rs.
25,000 in Karnataka and the maximum amount sanctioned was ranging between
Rs. 82,600 in Assam to Rs. 25.0 lakh in Punjab in case of sample borrowers.
Collateral Security
23. As reported by the sample farmers, no collateral security was being forced by
the banks for KCC limit up to Rs. 1.0 lakh. However, the banks were insisting
on land mortgage for KCC limits above Rs. 1.0 lakh in all the states. Banks were
mortgaging entire land which were recorded in the Land Possession Certificate
(LPC) or offered by the farmer for KCC loan and value of these lands were found
to be very high as compared to the quantum of loan.
Rate of Interest
24. The rate of interest on KCC loans charged by banks was 7% up to Rs. 3.0 lakh
but it was varying to some extent from bank to bank in case of crop loans above
Rs. 3.0 lakh. Not much difference was observed in the interest rate between KCC
loan above Rs. 3.0 lakh and other term loans for agriculture & allied activities.
