Chapter-1

INTRODUCTION

1
AGRIBUSINESS:-

Goldberg coins the term agribusiness together with co-author John H. Davis. It is the
business associated with the production, processing, preservation or marketing of agricultural
produces. It also includes business associated with inputs to the agriculture, both of organic and
inorganic nature, be it in the form of fertilizer, or pesticides, used in the individual farming or
cooperative farming or in contract farming, It also includes the business associated with animal
husbandry, fishery, piggery, floriculture, bee keeping, or the like. It may be activities related to the
marketing or Retail sales of Agricultural produce.

2
 The scope and spectrum of Agribusiness is so vast and so wide that it touches almost every
aspect of life and provides immense opportunities with the entrepreneur who deals with it. The
only requirement to go fast and higher up the ladder is through enthusiasm, dedication and an
innovative orientation in the psyche of the entrepreneur.

Agribusiness boundary expansion is driven by a variety of transaction costs within the agriculture
industry, "agribusiness" is used simply as a portmanteau of agriculture and business, referring to the
range of activities and disciplines encompassed by modern food production and marketing. The UN
Food and Agriculture Organization (FAO) operates a section devoted to Agribusiness Development
which seeks to promote food industry growth in developing nations. In the context of agribusiness
management in academia, each individual element of agriculture production and distribution may be
described as agribusinesses. However, the term "agribusiness" most often emphasizes the
"interdependence" of these various sectors within the production chain. Among critics of large-scale,
industrialized, vertically integrated food production, the term agribusiness is used negatively,
synonymous with corporate farming. Studies of agribusiness often Education, entrepreneurship, physical
infrastructure, and social infrastructure all play an important role in developing rural regions. In contrast
to urban regions, which have many similarities, rural areas are highly distinctive from one another. For
this reason there is a come from the academic fields of agricultural economics and management studies,
sometimes called agribusiness management.

To promote more development of food economies, many government agencies support the
research and publication of economic studies and reports exploring agribusiness and agribusiness
practices. Some of these studies are on foods produced for export are derived from agencies
focused on food exports. The types of agribusiness can be categorized in the following sectors :
Aquaculture, Dairy farming, Grazing, Hydroponics, Livestock, Pig farming, Orchards, Poultry
farming, Sheep husbandry and the like.

3
Rural Development

Rural development generally refers to the process of improving the quality of life and
economic well-being of people living in relatively isolated and sparsely populated areas.

large variety of rural development approaches used globally. Rural development actions
are mainly and mostly to development aim for the social and economic development of the rural
areas. Rural development programs are usually top-down from the local or regional authorities,
regional development agencies, NGOs, SHGs, national governments or international development
organizations. But then, local populations can also bring about endogenous initiatives for
development. Rural development aims at finding the ways to improve the rural lives with
participation of the rural people themselves so as to meet the required need of the rural area. The
outsider may not understand the setting, culture, language and other things prevalent in the local
area. As such, general people themselves have to participate in their sustainable rural development

4
Organization Profile:-

[Industrial Credit and Investment Corporation of India ]

ICICI bank was founded on 1955 by a group of eminent businessmen from Mumbai.
The Bank was under private ownership and control till July 1998 when it was
nationalized along with 13 other banks. The Bank has 4450 branches in India spread
over all states/ union territories including specialized branches. These branches are
controlled through 50 Zonal Offices. There are 54 branches/ offices, five subsidiaries
and one joint venture abroad. The Bank came out with its maiden public issue in 1997
and follow on.

5
Qualified Institutions Placement in February 2008. . While firmly adhering to a policy of
prudence and caution, the Bank has been in the forefront of introducing various innovative
services and systems. Business has been conducted with the successful blend of traditional
values and ethics and the most modern infrastructure.

The Bank has been the first among the nationalized banks to establish a fully
computerized branch and ATM facility. which facilitates provision of cost-effective financial
processing and communication services. It pioneered the introduction of the Health Code
System for evaluating/ rating its credit portfolio.
Presently Bank has overseas presence in 19 foreign countries spread over 5 continents –
with 30offices including 4 Subsidiaries, 2 Representative Offices and 1 Joint Venture, at key
banking and financial centers viz.,Bahrain , Germany , Hong kong , Singapore , Sri lanka , UK ,
USA.

The quality policy followed at ICICI Bank has four pillars:-

 Superior

 Pro-Active

 Innovative

 State of the Art

6
 Their vision is – “Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to our policy holders. Their mission statement is
– “We will leverage our people, technology ,speed and financial capital to be the banker of first
choice for our customers by delivering high quality ,world-class products and services.

Their tagline is – “Hum Hain Na” which shows their inclination in creating ties with their
customers that last long and remain strong.

The four main sectors served by the bank are:-

 Corporate

 Rural

 MSME

 Retail

7
Key Persons Of the ICICI Bank :-

ICICI :- Industrial Credit and Investment Corporation of India

Table No 1.

1] CEO Mrs. Chanda Kochhar

2] Managing Director Mrs. Chanda Kochhar
3] Head of Agri Banking Mr. A.Kaul
4] Non – Executive Chairman Girish Chandra Chaturvedi

8
 SLBC (STATE LEVEL BANKERS COMMITTEE)

State Level Bankers' Committee is the highest body of bankers in the state as per the Lead
Bank Scheme of Reserve Bank of India, is the highest body of bankers in the state. The committee
meets once a quarter, to review the activities of the institutional lending and to discuss various
issues concerning the economic development of the state, where banks play a pivotal role. The
forum takes the lead in initiating, streamlining and accelerating the process of development in
close co- ordination with various government departments, Reserve Bank of India, NABARD and
other developmental agencies. The quarterly meetings are attended by members at top-level
functionaries of SLBC, Government and Administration for meaningful and purposeful
discussions on various matters aimed at various issues.

9
 FUNCTIONS

1. To discuss issues, consider alternative solutions to the various problems in the field of
banking development and evolve consensus for coordinated action by the member institutions.

2. To do the necessary spadework for formulation of Annual Credit Plans for getting in time
district-wise resource allocation by banks and disaggregation’s of the various Government
Programs.
3. To undertake critical analysis of the progress of the implementation of Annual Credit Plans
& Government and other agencies sponsored credit linked programs/ schemes in the various
districts.
4. To review the assistance required and provided by Government agencies.
5. To consider problems referred by the district level forums and take necessary follow-up
action.

6. To oversee the implementation of branch expansion program.

7. To review the recovery performance.
8. To review the progress made in achieving the targets set under the various schemes.

9. Confirming/ratifying the action initiated by the Steering Committee of SLBC.

10
 The report in the beginning gives a complete perspective of ICICI Bank in agribusiness
and rural development sectors and details out its growth, models and experimentation based on
various studies being done. This helps the reader to get a first-hand and complete understanding of
the sector and its prospects. It also helps the reader to be informed about various issues before it
get to the specifics related to Pune district.

A sizeable share of population in India continues to remain outside the

The various bank linked program are being launched by government to bring the
untouched sectors of society into this mainstream and few of them have been widely acclaimed as
a successful model.

Knowing the importance of bank in agribusiness and rural development the present
investigation has been undertaken with following objectives:-

1. To analyze the Funds released by the bank for agriculture sector in its Annual Credit Plan
(ACP).

2. To assess the Agribusiness sector and women SHGs funded by Bank of India.
3. To study the Methodology adopted by Bank of India for selection of the SHGs for credit
line.

11
 Chapter-2

Review of Literature

12
Bhatt (1970) proposed that Lead Banks for providing finance and guidance to farmers and small
industrialists creates and support a set of approved dealers who assist the bank to collect the
required information, ensure recovery of loans and interest, assist in obtaining after sales service
and keep a watch on the working of the assisted enterprise.

Joshi (1972) requested the RBI to give clear and specific definition of the different
components of priority sectors as some of the bankers are not clear about the precise scope of
agricultural lending and guidance from the RBI would help them to increase their involvement in
farm credit on right line.

Dagli (1975) reported that the aim of the banking policy should be to uplift the under
privileged class of the society in rural India from subsistence existence to surplus existence. Thus
priority sector should include only the real poor of the country and by providing them necessary
financial assistance, they can be lifted from the pitches of animal existence to the heights of
human existence.

Hazari (1976) reported that Institutional financing should enable the agriculturists to move on to a

13
level of new technology that will increase agricultural output and employment, and does not mean
replacing individual moneylenders.

Angadi (1983) observed the reason for varying concentration of priority sector advances in
general and agricultural advances in particular in a few States are number of bank offices, deposit
mobilization, Total cropped area, land under certain food and cash crops, extent of irrigated land
In respective States, adoption of high yielding varieties.

Verma (1988) reported that Supervision of credit is the demand of the time and is
to be done by experts of rural credit with professional competence and liberal attitude as
supervised credit brings adequate income not only to repay the loan but also to raise the economic
standard of the rural poor.

Agarwal (1994) pointed out that what belongs to the priority Sector and what does not is
purely arbitrary. Ironically, exports have not been Included in the priority sector, which is a glaring
flaw in the credit system. So he suggested that it is time for the priority sector to be redefined.

Sinha (2001) the Union Finance Minister, advised that banks should proceed against large
and willful defaulters and bank should proceed to increase their lending to the agriculture and rural
sectors so as to reach the stipulated target of 18 per cent of their total lending going to these
sectors.

14
 Agnivesh (2001) reported that the loans availed by top industrialists to the tune of rupees
one lakh crore as non-performing assets while the poor farmers’ house and properties are
auctioned for recovering the loan amount by the banks even though it would be a meagre amount.

Objectives of study:-
1.To analyse the funds released by the banks for agriculture sector in Annual Credit Plan (ACP).

2.To know the facility available to farmers in ICICI Bank.

3.To study the SHG’s and banks relationships.

4. To study strategies of ICICI Ban to spread its reach to rural area.

5.To assess the Agribusiness sector and women SHG’s funded by ICICI Bank.

6.To study the Methodologies adopted by ICICI Bank for selection of the SHG’s for credit line.

15
 Chapter-3
METHODOLOGY

16
 The basic objective of this study is to find out SHG as a tool of financial inclusion and
microfinance and how the bank decides which SHG should be funded and which shouldn’t.
Through this study, various aspects of the Bank Linkage Programme at ICICI Bank are intended to
be studied and analyzed to find out what ICICI Bank is doing to spread its reach and how.

Selection of study location

The study will be confined only to ICICI Bank which is one of the Leading Bank in Pune
District. It has around 43 branches spreaded all around the Pune. These are located at Market
yard , Salunkhe Vihar, Pirangut , New Sanghvi , Wakad , Mohammadwadi , Sahakar nagar ,
Balewadi , B.T. Kawade road , Kharadi , Karve nagar , v.k. Society , Daund , Pashan road ,
Erandavana , Camp , MIT , Fatima Nagar , Model colony , Pimple Saudagar , PUNE , Shivaji
Memorial , Sinhgad road , Katraj , Tilak road , Aundh , Bavdhan , Mayur colony , Bund garden ,
Shivajinagar , Aundh , Kondwa , Chinchwad , Pune-Satara road , Kothrud , Senapati bapat road ,
Kalyani nagar , Magarpatta , Viman nagar , Baner , Bhandarkar nagar , R.P. Pune , S.P. Pune , .

17
 The study was conducted through analysing the following parameters:-

1. Growth in number of KCC accounts opened in year 2016-17 and 2017-2018.

2. Growth in number of KCC disbursement amount in the year 2017 and 2018.

Comparison of number of Women SHG bank-Linkage in the year 2016-17

3. Comparison of Women SHG disbursement amount in year 2016-17 and 2017-18

4. The criteria of selection and finance to SHGs by ICICI Bank.

Sources of Information

Primary Data would be collected from interaction with officials at ICICI Bank and
surveys conducted at different branches of ICICI Bank in Pune.

Secondary Data would be collected from the Bank’s journals and documents and
information in review of the literature as findings and observations of studies on similar or related
topics give a lot of help in deciding the direction of the study.

18
 Limitations

1. Bank may not be willing to reveal entire data regarding the topic.
2. Lack of cooperation from the officials

3. Since entire Pune district is under the study, data collection might be a cumbersome task.

4. Findings of the study may not reflect the clear picture of SHGs bank linked program of
ICICI for the entire country.

19
 Chapter -4

RESULTS AND DISCUSSION

(Data Collection)

20
 ICICI Bank works in the area of Direct Agriculture (demand loan and term loan), Indirect
Agriculture, Medium and Small Enterprises etc. Under direct agriculture, crop loan (KCC) is the
major area of finance whereas in Indirect Agriculture comes the allied sectors, irrigation, tractor or
machineries, drip irrigation, check dams etc.

Progress made by ICICI BANK in Agribusiness sector

Table No 2.

21
 Year Agriculture

Target Achieved Percentage

2014 204374 205479 72.26%

2015 227860 282650 124.05%

2016 366900 392600 107.00%

2017 2218 533700 240.62%

2018 2995 9506 317.40%

 Fig: - Annual Credit Plan (ACP) of ICICI for last 5 years in Agriculture sector (amt in
lakhs)

Table No 3.

22
Year MSME

Target Achieved Percentage

2014 109430 170864 55%

2015 213630 279626 131%

2016 275000 443500 161%

2017 4850 14701 303.11%

2018 5995 11250 187.66%

 Fig: - Annual Credit Plan (ACP) of ICICI for last 5 years in MSME. (Amount in lakhs)

23
Progress made by ICICI BANK in Rural Development

The SHG bank linkage programs run by ICICI Bank in pune District plays a pivotal role in
rural development rather than the role of NGOs and other rural agencies because the role of SHG
is more prominent in rural development than any other sector.

24
SHGs (Self Help Group)

25
 This pilot project was started in year 1992 when Yashwant Sinha was Finance Minister of
India. A self-help group is a village based financial intermediary committee usually composed of
10 to15 local women and men. Members have to make small regular savings contribution over a
few months until there is enough capital in a group to begin lending.

The Microfinance initiatives of Banks yielded remarkable success and the SHG-Bank
linkage program has emerged as the largest microfinance program in the world. The notable
feature of the programme is the active participation of women (90%) and timely loan repayment

26
(95%). The pilot project was started in 1992 when Yashwant Sinha was Finance Minister of India
and the project has turned into national movement, linking more than 1 million SHGs with bank
credit which led to socio-economic empowerment of women. During the year of 2015-16, around
11, 96,000 SHGs were credit linked with bank against 8, 32,103 during 2014-15 increasing the
cumulative number of SHGs credit linked with bank to 20, 28,103.

The SHG Bank Linkage Model has made considerable progress since its inception in the early
1990s and agency-wise outstanding number of credit linked SHGs and amount of loans given by is
presented in the table given below.

27
 Bank Loans Outstanding under SHG-Bank Linkage Programme

Banks have financed 15.87 lakh SHGs, including repeat loan to the existing SHGs, with bank
loans of Rs. 14,453 crores during 2016-17. Out of the total loans

2016-17 2017-18

Agency Amount Amount

SHGs (in’000) SHGs (in’000)
(In Crores) (In Crores)

Commercial
2831 16149 3237 20165
Banks

Regional
978 5224 1104 6144
Rural Banks

Cooperative
415 1306 510 1729
Banks

Total 4224 22679 4851 28038

disbursed during 2016-17, SHGs financed under SGSY accounted for 2.67 lakh (16.9%) with
bank loan of Rs. 2198.00 crore (15.2%). As on March 2017, the average loan amounts outstanding
per SHG and per member were Rs. 57795 and Rs. 4128 respectively. The estimated number of
households covered under the Self Help Group (SHG)-Bank Linkage Programme was 9.7 crores

up to31st March 2017.

28
Current Position of SHG-Bank Linkage Programme

Though there are different models for surveying microfinance, the Self-Help Group Bank
Linkage Programme has emerged as the major programme in the country. It is being implemented
by commercial banks, regional rural banks (RRBs), and cooperative banks. In 2009-10, 1.59
million new SHGs were credit- linked with banks, and bank loan of Rs. 14,453 crore (including
repeat loan) was disbursed to these SHGs. Further, about 6.95 million SHGs maintained savings
accounts with banks at the end of March 2017. On an average, the amount of savings per SHG
was 8,915 as compared to the amount of credit outstanding of 57,795 in 2016-17. While there was
a continuous increase in the amount of credit outstanding per SHG, there was a fluctuating trend in
the amount of saving per SHG in the recent years. According to the Status of Micro Finance in
India 2016- 2017 released by The National Bank for Agriculture and Rural Development
(NABARD) there are 69,53,000 SHGs in the country savings linked with banks and 48,51,000
SHGs having loan outstanding as on 31 March, 2017. The estimated number of households
covered under this model is about 970 lakhs. The total savings amount of all the SHGs with banks
as on 31 March, 2017 amounts to Rs. 6198.71 crore and the total amount of loans outstanding
against SHGs as on 31 March, 2017 is Rs. 28038.28 crore.

29
New SHGs Financed by Banks

Table no 5

Year No. (Lakh) Amount (Rs. Crore) Growth %

2012-13 12.28 8,849.26 –
2013-14 16.09 12,256.51 38.50
2014-15 15.85 14,453.30 17.90
2015-16 11.96 14,547.73 0.65

 Source: National Bank for Agriculture and Rural Development (NABARD)

Under the SHG-Bank Linkage Programme as on 31 March, 2017, Rs. 74.62 lakh SHGs have
savings bank accounts with total savings of Rs. 7,016 crores as against 69.53 lakh SHGs with
savings of Rs. 6,199 crores as on 31 March, 2016. By December 2017, another 2.98 lakh SHGs
have come under the ambit of the programme, taking the cumulative number of saving-linked
groups to 77.60 lakh SHGs. As on 31 March 2017, 47.87 lakh SHGs had outstanding bank loans
of Rs. 31,221 crores, as against 48.5 lakh SHGs with bank loans of Rs. 28,038 crore as on 31
March, 2016. This represents a decline of 1.3 percent in the number of SHGs and a growth of 11.4
percent in bank loans outstanding to SHGs as per table given above. During 2016-17, (upto
December 2017), 4.51 lakh SHGs have been financed with an amount of Rs. 6,791.46 crore. Thus,
the SHG-Bank Linkage Programme is considered as the largest financial inclusion programme in
the world.

30
Regional Distribution of SHG-Bank Linkage Programme
The SHG linkage program has been more popular in southern region as compared to the
rest of the country. Southern region accounted for 71.2 percent of the total SHGs by March
2006 followed by central, eastern and western region. However, over the years, program
picked-up and gained strength in non- southern regions also. A comparative analysis
between March 2006 and March 2016 shows a significant decline in the concentration of
the linkage program in terms of number of SHGs. The relative share of southern region
declined from 71.2 percent to 46.3 percent and consequently, the share of all other regions
increased from 28.8 percent to 53.7 percent. This reflects that program is becoming
increasingly popular among the non- southern regions which have lagged behind till 2000-
01. In fact, NABARD identified 13 priority states from non-southern regions that account
70 percent of the country’s rural population (viz. Assam, Bihar Chhattisgarh, Gujarat,
Himachal Pradesh, Jharkhand, Maharashtra, M.P., Orissa, Rajasthan, U.P., Uttaranchal and
West Bengal) and undertook special scaling-up efforts to expand the SHG linkage program
in these priority states.

31
 This has resulted manifold increase in the number of credit linked SHGs during 2006-16 in
these 13 states. Proactive measures such as emphasis on priority states, enlisting partnerships and
capacity building of partner agencies has served to expand the program in non-southern states. But
southern region still account for more than three-fourth (76.4 percent) of total loans disbursed by
banks under this program.

SHG Under Three Models

Over the years three distinct models have evolved under the SHG Bank- linkage
program:-

Model 1 – Bank SHG’S with active Support of Self- Help Promotion

Institutions (SHPIS): In this model SHGs are formed, nurtured and trained by NGOs
or government agencies called SHPI. The bank after observing their operations and maturity to
absorb credit provides credit directly. The SHPIs also keep a watch and ensure satisfactory
functioning of the SHGs even after the linkage.

Model 2 – SHGs Formed and Financed by Banks:

In this model, bank itself acts as SHPI by taking initiative to form these groups, train and
nurture them over a period of time. Then bank provides credit to them when satisfied about their

32
maturity to absorb credit.

Model 3 – SHGs Financed by Banks through NGOs and Other Agencies:

In this model NGOs promote the group, train and nurture them and then approach banks
for bulk loans for lending to SHGs. Thus NGOs act both as facilitators and micro-finance
intermediaries.

The table below shows that SHGs formed by SHPIs but directly financed by banks is most
popular accounting 72 percent of the total number of SHGs linked under the program by March
31, 2016. This is because NGOs can easily outreach the poorer sections of the society as the
people have greater acceptance and confidence on them because of their participation in socio-
economic activities for development of poor.

33
PROCESS OF SHG BANK-LINKAGE

There are two types of SHGs financed by the bank:-

1. SHGs formed by the government and supported with the subsidy provided by the
government.

2. SHGs formed purely by the banks or NGOs nurtured and supported by the banks.

The type 1 includes SHGs under SGSY scheme which are promoted and sponsored by the
government and then credit linked by the bank. In this case approval of a particular project is done
with 50% subsidy maximum provided by the government. In normal cases no grooming on the
SHGs is done for handling the fund received by them, As a result it has been observed that the
interest of SHGs remain focused on the immediat money amongst the group members and use it
mostly for consumption purpose. They do not normally think that they should circulate the money
for generation of adequate income on a recurring basis. As a result, in most of the cases the project
fails to generate adequate income for repayment of the bank loan due to lack of proper orientation
and counseling before the receipt of fund from the bank and the government.

In type 2, certain NGOs are selected after proper screening to motivate the women for
formation of SHGs. They are apprised of the benefits and the mutual support system they can
create by coming together and forming an SHG group. They are informed about the ways by
which they can put the available funds from their small but regular savings to use as well as utilize
the credit support that they may receive from the banks after attaining a certain efficiency level
that can be measured by the system of grading.

34
 The grading may be self-grading, grading by the sponsor NGOs or grading by the banks
where they open their SHG accounts. (VO and cluster go for auditing) The selected NGOs have
been allocated funds by the sponsor bank, to be spent on the formation of SHGs, for their capacity
building in the form of training, on book- keeping, holding of regular meetings, inter-lending
amongst members. The recovery of the funds lent to the members as per the repayment schedule
have also been fixed at the time of financing the advance

The SHG groups are encouraged to handle the small funds raised from their monthly
savings and charge interest on the funds lent to individual members they also charge penal
interest in case of any delay in repayment. Thus they are trained to treat their organization
as a mini bank and follow the basic banking norms in a very simple and miniature form.
Once this banking orientation and culture gets inculcated, the SHGs are found to work
efficiently by appraising every reques loan from the members and ensuring timely
repayment through well management of their funds. They normally charge interest @ 2%
per month from their members and pay back to the bank (or the Village organization) @1%
per month on an average. Thus they are having a cushion of around 1% per month on their
loan portfolio which acts as insurance for accidental default in repayment by a certain
member. It also contributes towards a modest growth of their corpus.

The NGOs like Mahila Jagriti Samiti, who have been nurturing the groups from the very
beginning have entered in to an agreement with ICICI Bank that they’ll follow-up with the groups
and ensure timely repayment of dues otherwise the overdue amount of the SHGs, is liable to be
deducted from the payment of the NGOs. This agreement satisfies both the bank and the NGOs.

35
 CRITERIA CHECKED BEFORE EXTENDING FINANCE

ICICI Banks looks for 5 things in an SHG to decide if it is worthy of bank finance. These criteria
are also known as the SHG Panchasutra:-

1. Regular Meetings
2. Savings (Corpus)
3. Internal Lending’s
4. Recoveries
5. Proper maintenance of books and records

The SHGs are given grading’s on the basis of above mentioned criteria. These criteria have
further sub-criteria on the basis of which they are given score. The higher an SHG scores on a total
of 150, the more funds are likely to be received by the SHG.

The bank also ensures that the group is involved in some economic activity so that the
money lent to them can help in their upliftment. The profit generated by them will also help in
repaying the loan. After granting the loan the bank also monitor the business activities of the SHG.

36
 Earlier 20 members were required in an SHG to qualify for bank linkage programme. Later
on this number was reduced to 10-15 as chances of dispute among member’s increases in a larger
group.

The group can be extend a finance of upto 4 times of its corpus depending upon the score
obtained by it. The interest rate charged to them is 7% and if they make timely monthly payment,
they are given 3% subsidy which is borne by the government.

37
 Analysis of Data

ANALYSIS OF THE NUMBERS OF WOMEN SHG BANK- LINKAGE AND AMOUNT

DISBURSED TO THEM (2016-17 2017-18)

No of bank-linked Women SHGs

700
Numbers of SHGs

600

500

400

300

200

100

YEAR 2 016-17
YEAR0
20 17-18
NO OF bank-linked
Women SHGs
Fig:-3The above figure shows that total Women SHGs linked with ICICI Bank in Pune District has
increased from 347 on March 2017 to 665 on March 2018. This means that the number of bank-linked
Women SHGs has increased by 318 which is about 47.8% higher from the previous year.

38
KCC (KISAN CREDIT CARD)

KCC is a credit card to provide affordable credit for farmers in India. It was started by
Government of India, Reserve bank of India and National bank for agriculture and rural
development in 2004 – 2005to help farmer’s access timely and adequate credit. This card is valid
for 3 years and subject to annual renewals.

PROCESS OF KCC ACCOUNT FINANCE

39
 Objective:-

1. Kisan Credit Card Scheme aims at providing need based and timely credit support to the
farmers for their cultivation needs as well as non-farm activities in cost effective manner.
2. To bring flexibility and operational freedom in credit utilization.

Eligibility:-

1. Under the scheme, Branches may issue Kisan Credit Cards to the farmers who are eligible
for sanction of short term credit for crop production, allied activities and other non-farm activities.
2. The farmers should belong from the operational area of the Branch

DOCUMENT REQUIRED FOR THE KISAN CREDIT CARD :-

40
  Simplified application form
 KYC Document
 Land Documents
 Security PDC
 Any other document, as per sanction condition

Interest Charges for Kisan Credit Card :-

Table No 6

Product Minimum Maximum Mean

Kisan Credit Card 9.10% 12.90% 11.91%

NOTES –
1. The range of interest rate provided is with respect to individual loans disbursed between Apr 1,
2018 to Jun 30, 2018.

2. Mean rate – Sum of rate of all loans/ number of loan accounts.

3. The rate of interest is dependent on credit assessment parameters of the bank.

4. Data excludes lending done under the crop loan subvention schemes of the government.

BENEFIT AVAILABLE FOR KISAN CREDIT CARD :-

ICICI Bank Kisan Credit Card comes with a host of benefits, some of which are :

 Convenient banking :-

41
You need not to compromise with your day to day work while banking with us. Experience the new age
banking with ICICI Bank through large branch & ATM network with 24*7 customer care support.

 Wide Network :-
ICICI Bank Kisan Credit Card can be used at any bank’s ATM apart from ICICI Bank’s large coverage of
10000+ ATM’s across the country.

 Card limit :-
The Kisan Credit Card limit is sanctioned for 5 years with one time documentation and shall be renewed
every years based on your farming requirements.

KCC ELIGIBILITY CALCULATOR -

1. District :-

2. Irrigated Land (in acres) :-

3. Unirrigated Land (in acres) :-

4. Entire Land ( in acres) :-

5. Type of funding :- i] General KCC , ii] Subvention KCC

6. Land Value :-

7. Requested Loan Amount :-

8. Number of Crops :- [ 1,2,3,4,5,6,7 ]

42
9. Crop Insurance :-

10. 1st year KCC Limit :-

11. 5th year KCC

TYPES OF AGRICULTURE LOANS :-

Farmers Finance supports you using a whole farm approach – supports in all aspects of
agriculture our agriculture loans meet our both short term and long term credit needs.

1] Retail Agri loan :-

Kisan Credit Card (KCC) is a specially designed credit card for farmers. This card gives you the
facility of a hassle free and convenient credit to meet your day to day farming requirements.

2] Long term loan for Agriculture & allied activities :-

You can get term loans to buy cattle or agriculture equipments as a part of the Agricultural Term
Loan (Agri TL ) scheme from ICICI Bank. Repay these loans over a period of 3-4 years In
monthly / Half yearly / Yearly instalments as per your convenience .

You get multiple benefits with ICICI Bank Agriculture Loans:

 Simplified documentation

 Easy and convenient loan

 Flexible loan repayment option based on your income

43
  Attractive interest rates

 No hidden charges

 Quick processing

 Non-mortgage loans are available

3] Instant Gold Loan :-

44
ICICI Bank Gold Loan is the ultimate solution for

your financial needs . you can avail Gold loan whenever you need funds for education of children,
business expansion , down payment for purchase of property , specially for Agriculutre needs.

45
With ICICI Bank Gold Loan you’ll get :

 Instant Loan across the table

 Attractive Interest rates

 Simple & easy Documentation

 Repayment At the end of loan tenure

 Complete safety of jewels

4] Agri Traders & Processors :-

ICICI Bank recognizes your key role in the Agricultural supply chain. ICICI Bank offers you financing
option designed to service your specific requirements. Be it overdrafts or loans our approvals are
localised , speedy and hassle free.

46
a] Working capital loans :-

ICICI Bank’s Rural and inclusive Banking Group (RIBG) offers overdrafts and cash credit facility to traders
, processors , transporters , aggregations etc. in the Agri- sector . This group also caters to the needs of
the customers through term loan facilities for enhancement of existing capacity / expansion of working
units / constructions of warehouses etc.

Working capital loans are offered for the following products :-

i. Smart Cash Credit (SCC)

ii. Agri Credit Line (ACL)

iii. Jet Overdraft

47
 iv. Micro Enterprise Credit (MEC)

v. Agri development Loan (ADL)

vi. Warehouse Construction Loan

i] Smart Cash Credit (SCC) :-

SCC is the final assistance to large agri and rural enterprises for the working capital needs of the
businesses with hypothecation of stock & debtors and supported by property as collateral security.
Smart Cash has a range of products like Cash Credit , Letter of Credit , Bank Guarantee , Term Loans ,
Export Packing Credit (EPC) etc.

Features :-

 Limit: Minimum Rs. 25 lakhs, Maximum Rs. 20 crores

 Product Range : Cash Credit, Term loan , Letter of credit , Bank Guarantee ,
Export packing credit etc.

48
  Tenure :- Cash Credit for 12 months , Term loan for 5 years for purchase of plant,
machinery &equipments , Term loan for 7 years for project cost including land &
building.

 Security :- Charge on current assets i.e. stocks and debtors supported with
commercial / residential / Industrial property.

 Repayment :- For cash credit the interest on the outstanding loan amount is payble
monthly term loan is repaid as per fixed EMIs.

 Repayment mode :- Through regular transactions in the account

 Renewal of the account depends on maintenance of good track record and

submission of fresh financial documents.

Ii] Agri Credit Line (ACL) :-

Agri Credit Line is financial assistance to rural enterprises in the form of overdrafts based on property &
income . The borrowers can avail OD facility upto 5 crores and the interest will be charged only on the
utilised amount.

Features :-

49
  Limit :- Minimum Rs.10 Lakhs , Maximum Rs. 5 crores

 Tenure :- The overdraft term is 12 months and is renewable

 Security :- Residential / commercial / industrial land or property

.

 Repayment :- For overdrafts the interest on the outstanding loan amount is

payable monthly.

 Through regular transactions in the accounts.

 Renewal of the OD account depends on maintenance of good track record and

submission of fresh financial documents.

Iii] Agri Development Loan :-

Overdraft facility to individual / proprietorship firms for cultivation / harvesting of agri commodities.

Features :-

 Limit :- Minimum Rs. 1 lakh to Maximum Rs. 25 lakhs

50
  Security :- Facility against Residential Property / Commercial Property

 Interest charged only on amount used

5] Agri Corportaes :-

ICICI Banks recognises the role of prompt finance and stable cashflows for a business. We offer a range
of products tailored to your unique needs . with ICICI Bank on your side you can focus all your energies
on the growth of your business.

i] Mid Cap Credit :-

ICICI Bank has Specialised programmes to cater to small and medium Agribusiness Enterprises to meet
their specific financing needs.

Ii] Factoring :-

ICICI Banks Factoring performs an important trade finance service by helping you convert your
receivables into cash – thus helping you tide over constraints of cash flow and working capital.

Iii] Agri Investment Banking Solutions :-

The recent trends of domestic and global takeovers , mergers, acquisitions, strategic alliances and
diversifications, reflect Agri Indian Corporates and SMEs global leadership aspirations and these have
become the integral part of companies globalisation strategies .

51
6] Tractor Loan:-

52
ICICI Bank offers easy and hassle free tractor loans for first time buyers/tractor owners having
agricultural land.

Benefits :-

 Easy loan procedure

53
  Quick Processing

 Repayment period up to 5 years

 Flexible repayment options

 Fixed Rate of interest throughout the tenure

 Non-mortgage loan available

 Low processing fee

 Low Interest rate

6] Micro Banking :-

54
ICICI Bank has created products that are simple , convenient and locally accessible so as to maximise
your comfort.

i] Self Help Groups :-

55
 Self Help Groups (SHGs) are homogeneous group of 10-20 individuals who get together for saving and
internally helping each other in times of needs .

ii] Micro Savings :-

Recognising the need for easy saving facilities for its low-income customers , ICICI Bank has pioneered
the launch of micro savings products under its Business Correspondent model.

Iii] Micro Finance :-

Access to financial services is a key element in the process of socio- economic empowerment of the
financially under served sections of the society. At ICICI Bank, we support initiatives to enhance
access to financial services by bridging gaps wherever there are missing markets to improve livelihood
opportunities and productivity in the country and bring more people into the socio-economic
mainstream thus contributing to the full realisation of India’s vast untapped market .

Quantum of Finance and margin:-

1. For production / short term purposes - Loan amount will depend upon the type of crop,
area under cultivation and scale of finance.
2. Short term working capital - For ancillary activities and minor investment of medium
term nature.
3. Short term credit for consumption / domestic needs To the extent of up to 25 percent of
gross estimated income of the farmer and maximum up to Rs.50,000/=.
4. Finance against storage receipts / produce marketing may be considered maximum up to
50 percent of the price of the produce prevailing at the time of storage / sanction of loan. Limits /
advances up to Rs.10 lakhs per farmer can be extended for a maximum period of 12 months.

Note:

56
1. While fixing the limit, the Branch 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.
2. The credit limit could also be provided for allied activities and non-farm credit needs for
borrowers.
3. The credit limit under the card may be fixed on the basis of the operational land holding,
cropping pattern and scale of finance as recommended by the District Level Technical Committee
(DLTC) / State Level Technical Committee (SLTC). Wherever the DLTC / SLTC have not
recommended scale of finance for any crop or recommended lower finance than the

required amount, the Branches may fix appropriate scale of finance after due approval by the Zonal
Office.
4. For fixation of credit card limit, the operational land holding includes the leased-in land
and exclude leased out land.
5. Branches may at their discretion fix appropriate sub-limits within the overall credit limit
sanctioned, taking into account the seasonality in credit requirements.

Security:-

1. Upto Rs.50, 000/=: D. P. Note Hypothecation of standing crops.

2. Above Rs.50, 000/=: D. P. Note Hypothecation of standing crops Mortgage of land /
Collateral security.

57
Note:

In case the value of land mortgaged is adequate, no other security should be obtained.

For finance against Government warehouse receipts, mortgage may be waived. Waiver of
mortgage of land in deserving cases may be considered as per security norms. The RBI norms on
security should be strictly adhered to.

58
ANALYSIS OF THE NUMBERS OF KCC OPENED AND

AMOUNT DISBURSED

Number of KCC
9500 account

9000

8500

8000

7500

7000
Number of KCC opened in Number of KCC opened in year
Year 2016-17 2017-18
2012-13 9379
Number of KCC account7845

The figure shows the number of KCC account which have been linked with ICICI Bank in
Pune District in year 2016-17and 2017-18.

59
60
 Amount Disbursed to KCC Accounts (in lakhs)
3500

3000

2500

2000

1500

1000

500

0
YEAR 2016-17 YEAR 17-18
Amount Disbursed to KCC
2166.24 2928.67
Accounts (in lakhs)

61
Branch Wise KCC Account and Women SHGs Bank Linkage Opened In Year 2016-17
2017-18

KCC
Name Account KCC account SHGs SHGs
S.NO Of Opened in Opened linkage in 2016- linkage in
17 2017-2018
Branch 2016-2017 2016-2017

1. Daund 206 308 13 21

2. Bahul 20 30 7 11
3. Indapur 186 208 6 12
4. Bhosari 19 38 7 9
5. Dhanori 278 356 13 18
6. lonavla 201 232 15 19
7. Malthan 67 85 4 6
8. Manjri 18 26 3 5
9. Narayangaon 352 408 17 31
10. Narhe 300 362 14 19
11. Ranjangaon - - - -
12. Wagholi - - - -
13. Shirur - - - -
14. Talegaon 323 329 14 22
15. Vishrantwadi 620 702 22 41
16. Vadgaon 17 29 4 9
17. Wakad - - - -
18. kondhwa - - - -
19. Fatimanagar 67 87 2 5
20. Undri 47 57 3 6
21. Pisoli 201 286 9 14
22. Pimple Saudagar 347 362 11 16
23. Hingwadi 203 278 11 14
24. Aundh 303 347 12 15

62
 chapter-5
FINDINGS

63
1. There are altogether 43 branches of ICICI Bank operating in Pune District.

2. The Indapur branch of ICICI Bank is the leading branch and doing impressive work in the
field of agribusiness and rural development.

3. The scope of Agri Business at Pune District has increased manifold due to the proactive
actions taken by the Bankers”

4. Number of farmers who are given loans in the year 2016-17 was 7845 while the no. of
farmers who were given loans in the year 2017-18 was 9379. Thus, there has been an increase of
16.3% number of farmers who have been provided with bank assistance.

5. The amount of loan disbursed during the year 2016-17 was 2166.24 lakhs while the
amount of loan disbursed to the farmers during the year 2017-18 was 2928.67 lakhs. Thus there
has been an increase of 26.03% in the amount of finance that has been given to the farmers in
2017-18 over that given in 2016-17.

6. The proactive action taken by the bank resulted in increase in the financial support to the
farmers in Pune district both horizontally and vertically i.e. both in coverage of farmers and in the
exact quantum of assistance given.

64
7. ICICI Banks SHG-Bank linkage program has increased the flow of institutional credit to
the poorer section.”

8. Number of women SHGs who were given loans in the year 2016-17 was 347 while the no.
of women SHG who was given loans in the year 2017-18 was 665. Thus, there has been an
increase of 47.8% Women SHGs who have been provided with bank assistance.

9. The amount of loan disbursed during the year 2016-17 was 187 lakhs while the amount of
loan disbursed to the farmers during the year 2017-18 was
318.6 lakhs. Thus, there has been an increase of 41.3% in the amount of finance that has been
given to the Women SHGs in 2017-18 over that given in 2016-17

10. Bankers have been also instrumental in capacity building of the rural folks by giving them
residential vocational training in the RUDSETTI and RSETTI free of cost in the fields of agarbatti
making, bee keeping, mobile repairing, computer training etc. and also developing entrepreneurial
capabilities of the rural people, thus playing instrumental role in rural development.

Conclusion:-

1. ICICI Bank are co-operate to the farmers in good manner .

2. The marketing of ICICI Bank in rural area is less as compare to urban areas.
3. The SHG’s are depends upon the majorly on banks .

65
4. Kisan Credit Card (KCC) is best facilityof ICICI Bank to the farmers.

Suggestions :-

 The interest rates of the Agricultural loans should be decreased.

 The needs to more marketing into the Rural areas.
 Open more branches into the rural areas.
 Maintain the relationship with the Self Help Groups (SHGs).
 Increase contacts with the more Self Help Groups (SHGs) .
 The loan procedure is create more sophisticated to illiterate farmers.
 The Kisan Credit Card limit should be increased.
 Arrange more promotional activities in Rural area.
 Give information about what will available for farmers in to Bank.
 To encourage people for taking Agricultural loans.

66
 Annexure
sr. No Max. Marks
.
Criteria Obtained

1 Group

(a) Size (i) 15-20 10

(ii) 11-14 5

(b) Samrupta (i) Samrupta 10

(ii) Asamrupta 5

(c ) Age of the Group (i) 2 yrs. and above 10

(ii) 1-2 yrs. 7

(iii) 6mths. - 1 yr. 5

2 Meetings

Frequ Meetings per month (in

(a) the last 6mths.) (i) Weekly (4 times a month)
10
(ii) Fortnightly (twice a month) 7

(iii) Monthly (once a month) 5

(b) Attendance Rate (i) More than 90% 10

(ii) 70-90% 5

(iii) Less than 70% 2

3 Savings

Frequency of Savings per

(a) month (i) 4 times (weekly) 10
(ii) 3 times 8

67
 (iii) 2 times 6

(iv) once (monthly) 4

(b) Regularity (i) Regular 10

(ii) Irregular 5

(c ) Savings Rate (i) Stable 5

(ii) Unstable 3

SHG GRADING FORM

68
e) Purpose (I i) ≥90% for productive purpose 1

(ii) upto 70% for productive

Purpose

(iii) upto 50% for productive

Purpose

f) Return Rate (i) 95-100% 1

(ii) 80-94%

(iii) 50- 79%

(iv) <50 %

g) Percentage of Members
Benefited
(i) >50%
(ii) 25-49% 1

(iii) <25%

Maintenance of Documents

h) Maintaining Books of Accounts (i) Personal Books of Accounts

(ii) Meeting's Collection 2

(iii) Savings

(iv) Loan Account

(v) Cash Book

i) Quality Maintenance (i) Very Good

(ii) Good 1

(iii) Average

(iv) Below Average

Awareness

Pur Group, Bank Linkage, Govt. Policies

69
 j) and
(i) All members are aware
Limitless

(ii) >90% are aware

(iii) 80-90% are aware

(iv) 70-80% are aware

(v) 60-70% are aware

(vi) 50-60% are aware 1

(vii) 40-50% are aware

(viii) 30-40% are aware

(ix) 20-30% are aware

(x) <20% are aware

k) Literacy Level (i) 90-100% Literate

(iv) 60-70% Literate

(v) 50-60% Literate 1

(vi) <50% Literate

) Decision-Making (i) After Everyone's Consent

(ii) Only the Group President 1

m) Change in Leadership (i) Every Year

(ii) 1-2 yrs. 2

(iii) After 2 yrs.

) P participation in Social Activities (i) Excellent

(ii) Good 2

(iii) Average

70
 (iv) Below Average

TOTAL MARKS 150

71
References

BHATT, V. V (1970) “BANK FINANCE TO AGRICULTURE, SMALL INDUSTRY

PROPOSAL FOR A SCHEME OF APPROVED DEALERS.

JOSHI, P. N (1972) “FINANCING OF PRIORITY SECTORS BY COMMERCIAL

BANKS,”THE JOURNAL OF THE INDIAN INSTITUTE OF BANKERS,”

VADILAL DAGLI, (1975) “SOCIAL RESPONSIBILITY OF COMMERCIAL BANKS,”

THE JOURNAL OF THE INDIAN INSTITUTE OF BANKERS.

HAZARI, R.K., (1976) “FINANCING OF AGRICULTURE DEVELOPMENT,”

ANGADI, V. B., (1983) “BANKS’ ADVANCES TO PRIORITY SECTORS

- AN ENQUIRY INTO THE CAUSES OF CONCENTRATION,”

VERMA, S. K., (1988) “SUPERVISED RURAL CREDIT,” NATIONAL BANK NEWS REVIEW.

YESHWANT SINHA, (2001) “BANKS TO TAKE BIG DEFAULTERS TO COURT,”

THE HINDU.

AGARWALA, R. G., (1994) “EDITORIAL” BANKING FINANCE. SWAMI AGNIVESH, (2001)

“LIBERALISATION TAKING

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