Priority Sector Guidelines

Priority sector Guidelines
Categories under (1) Agriculture (2) Micro and Small Enterprises (3) Export Credit
Priority Sector (4) Education (5) Housing (6) Social infrastructure (7) Renewable
energy (8)
Others
Targets /Sub-targets for Priority sector:
The targets and sub-targets set under priority sector lending, to be
computed on the basis of the ANBC/ CEOBE as applicable as on the
corresponding date of the preceding year, are as under:
Categories Domestic Foreign banks Regional Rural Small
commercial banks with less than Banks Finance
(excl. RRBs & SFBs) & 20 branches Banks
foreign banks with 20
branches and
above
Total 40 per cent of ANBC as 40 per cent of 75 per cent of 75 per cent
Priority computed in para 6 ANBC as ANBC as of ANBC as
Sector below or CEOBE computed in computed in para computed in
whichever is higher para 6 below or CEOBE para 6 below
6 below or whichever is or CEOBE
CEOBE higher; However, whichever is
whichever lending to higher.
is higher; Medium
out of Enterprises, Social
which up to 32% Infrastructure and
can be in the Renewable
form of lending Energy shall be
to Exports and reckoned for
not less than 8% priority sector
can be to any achievement
other priority only
sector up to 15 per cent
of ANBC.
Agriculture 18 per cent of ANBC or Not 18 per cent ANBC 18 per cent
CEOBE, whichever is applicable or CEOBE, of ANBC or
higher; out of which whichever is CEOBE,
a target of 10 higher; out of whichever is
percent# is prescribed which a target of higher; out of
for Small and Marginal 10 percent# is which a
Farmers (SMFs) prescribed for target of 10
SMFs percent# is
prescribed
for SMFs
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Pre-Promotion Training Material 2020 Indian Overseas Bank, Staff College
Micro 7.5 per cent of ANBC Not 7.5 per cent of 7.5 per cent
Enterprises or CEOBE, whichever applicable ANBC or CEOBE, of ANBC or
is higher whichever isCEOBE,
higher whichever is
higher
Advances 12 percent# of ANBC Not 15 per cent of 12 percent#
to Weaker or CEOBE, whichever applicable ANBC or CEOBE, of ANBC or
Sections is higher whichever is CEOBE,
higher whichever is
higher
Export Credit (not applicable to RRBs and LABs):
Export credit under agriculture and MSME sectors are allowed to be classified as PSL
in the respective categories viz. agriculture and MSME. Export Credit (other than in
agriculture and MSME) will be allowed to be classified as priority sector as per the
following table:
Domestic banks / WoS of Foreign banks with 20 Foreign banks
Foreign banks/ SFBs/ UCBs branches and above with less
than 20 branches
Incremental export credit over Incremental export credit over Export credit up
corresponding date of the corresponding date of the to 32 per cent of
preceding year, up to 2 per preceding year, up to 2 percent ANBC or CEOBE
cent of ANBC or CEOBE of ANBC or CEOBE whichever is whichever is
whichever is higher, subject to a higher. higher.
sanctioned limit of up to ₹ 40
crore per borrower.
EDUCATION Loans to individuals for educational purposes, including
vocational courses, not exceeding 20 lakh will be

considered as eligible for priority sector classification.
Loans currently classified as priority sector will continue till
maturity.
HOUSING *Loans to individuals up to Rs.35.00 lakh in metropolitan

Centres (with population of ten lakh and above) and loans
up to Rs.25.00 lakh in other centres for
purchase/construction of a dwelling unit per family provided
the overall cost of the dwelling unit in the metropolitan
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Centre and at other centres should not exceed Rs.45 lakh
and Rs.30 lakh respectively
* The housing loans to banks’ own employees will be

excluded.
*Loans up to ₹10 lakh in metropolitan centres and up to ₹6

lakh in other centres for repairs to damaged dwelling units
conforming to the overall cost of the dwelling unit.
*Bank loans to any governmental agency for

construction of dwelling units or for slum clearance and
rehabilitation of slum dwellers subject to dwelling units
with carpet area of not more than 60 sq.m.
*Bank loans for affordable housing projects using at least

50% of FAR/FSI for dwelling units with carpet area of not
more than 60 sq.m.
*Bank loans to HFCs (approved by NHB for their refinance) for

on-lending, up to ₹20 lakh for individual borrowers, for
purchase/construction/ reconstruction of individual dwelling
units or for slum clearance and rehabilitation of slum dwellers
Social
Bank loans up to a limit of ₹5 crore per borrower for
Infrastructure
setting up schools, drinking water facilities and sanitation
facilities including construction/ refurbishment of
household toilets and water improvements at household
level, etc. and loans up to a limit of ₹10 crore per
borrower for building health care facilities including under
‘Ayushman Bharat’ in Tier II to Tier VI centres.
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Renewable Energy Bank loans up to a limit of ₹30 crore to borrowers for purposes
like solar based power generators, biomass-based power

generators, wind mills, micro-hydel plants and for non-
conventional energy based public utilities, viz., street lighting
systems and remote village electrification etc., will be eligible
for Priority Sector classification. For individual households, the
loan limit will be ₹10 lakh per borrower
Categories Primary Urban Co-operative Bank

Total Priority 40 per cent of ANBC or CEOBE, whichever is higher, which
Sector shall stand increased to 75 per cent of ANBC or CEOBE,
whichever is higher, with effect from March 31, 2024. UCBs
shall comply with the stipulated target as per the following
milestones:
Existing March March 31, March 31, March
target 31, 2022 2023 31,
2021 2024
40% 45% 50% 60% 75%
Micro 7.5 per cent of ANBC or Credit Equivalent Amount of Off-
Enterprises Balance
Sheet Exposure, whichever is higher
Advances to 12 per cent# of ANBC or credit equivalent amount of Off-
Weaker Sections Balance Sheet Exposure, whichever is higher.
# Revised targets for weaker sections will be implemented in a phased manner as indicated
below
Financial Year Small and Weaker Sections target ^
Marginal
Farmers
target *
2020-21 8% 10%
2021-22 9% 11%
2022-23 9.5% 11.5%
2023-24 10% 12%
* Not applicable to UCBs
^ Weaker Sections target for RRBs will continue to be 15% of ANBC or CEOBE,
whichever is higher.
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PMEGP (PRIME MINISTER’S EMPLOYEMENT GENERATION PROGRAM)
Objective: For generation of employment opportunities through establishment of micro

enterprises in rural as well as urban areas.
Implementing Agency: Khadi and Village Industries Commission (KVIC) as the single nodal agency
at the National level. At the State level, the Scheme will be implemented through State KVIC
Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs)
and banks.
Project cost: The maximum cost of the project / unit admissible under manufacturing sector is
Rs.25 lakh. The maximum cost of the project / unit admissible under business /
service sector is Rs.10 lakh.
Eligibility conditions:
 Any individual, age above 18 years,

 no income ceiling,
 8th standard pass for Rs10lac and above(manufacturing), Rs5lacs &
above(service)project.
 Assistance only for new projects sanctioned under pmegp. Existing units who
already enjoying any govt assistance not eligible.
 One person from one family only eligible for subsidy.
 EDP training mandatory to attend after sanction of loan.
Quantum and nature of finance assistance:

Categories of beneficiary Beneficiary Rate of Rate of
contribution(margin subsidy subsidy
money) (urban) (rural)
General category 10% 15% 25%
Special 25% 35%
category(SC/ST/OBC/Women/ex-
servicemen/physically 5%
handicapped/NER/hill and
border areas)
Nature of finance: can be CC, Term loan or Composite loan

Subsidy: Lock in period is 3 years. It should be kept as term deposit for 3 years. No interest
to be paid on deposit and no interest is charged on loan on equivalent amount. Only
after 3 years it can be adjusted.
Repayment:3 to 7years
Under PMEGP scheme online applications will be mandatory and no manual applications will be
allowed.
Guidelines for second financial assistance under PMEGP for expansion of the
existing successful PMEGP/MUDRA Units
Objective: to cater needs of entrepreneurs for bringing new technology so as to
modernize the existing unit and to enhance the productivity/capacity of existing units
assuring additional wage employment.
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Quantum and nature of financial assistance:
Categories of beneficiary Beneficiary contribution Rate of subsidy(of project
cost)
All categories 10%(of proposed 15%(20% in NER and hill
expansion/upgradation states)
cost)
Maximum cost of project under manufacturing for upgradation is Rs100.00lacs and for
service/trading sector is Rs25.00lacs
Eligibility:
a) All existing units financed under PMEGP scheme whose margin money claim has
been adjusted and first loan fully paid in stipulated time
b) unit should be making profit for last 3 years
c)Registration of Udyog Aadhar memorandum is mandatory
d)2nd loan should lead to additional employment
KVIC will remain as single national level nodal agency
SCHEME FOR REHABILITATION OF MANUAL SCAVENGERS(SRMS)
 Scheme launched under prohibition of employment as Manual Scavengers and

their Rehabilitation Act 2013 by modifying the earlier scheme 2007.
 Scheme implemented by National Safai Karamchari Finance and Development
Corp under Ministry of Social Justice.
 Manual Scavengers and their dependants irrespective of their income are eligible
(min age 18 years)
 Training: Beneficiaries to be provided 2 years training with stipend @ Rs.3000 per
month.
 Cash Assistance: Identified persons (one from each family) eligible for cash
assistance of Rs.40000/-(withdraw able in monthly instalment of Rs.7000/)
 Max Loan Amount: Rs.10 lac(in case of sanitation related projects, the loan
amount is Rs.15 lac)
 Repayment:
Project up to Rs.5 lac : 5years
Project above Rs.5 lac : 7years
*(including moratorium period of 2 years)
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 Rate of Interest:
Project up to Rs.25000: 5%(4% for women)
Project above Rs.25000: 6%
 Back Ended Capital Subsidy:
Project Cost Rate of Subsidy
Up to Rs.2 lac 50% project cost
>Rs.2lac to Rs.5lac Rs.1 lac + 33.3% of project cost above
Rs.2lac
>Rs5 lac to Rs.10 lac Rs.2 lac + 25% of project cost above
Rs.5 lac
>Rs.10 lac to Rs15 lac Rs.3.25 lac
 Full amount of loan shall be disbursed including amount of subsidy

 In case of misuse, borrower is liable to repay back the subsidy amount @9%
per annum interest.
IOB GHARONDA
Pradhan Mantri Awas Yojana- Housing for all(Urban):
Mission and Duration: “Housing for all” mission for Urban Area by 2022
Objective: to address the housing requirement of urban poor
Eligibility:
 The beneficiary family should not own a pucca house (Pucca house: an all-
weather dwelling unit either in his/her name or in name of any member of his family
in any part of India)
 House should be in the name of of female head of household or in the joint name
of male head of household and his wife, and only in cases when there is no adult
female member in the family, the house can be in name of male member of the
household
 Interest subvention is available only to those borrowers who has not availed any
other benefit from other Govt Schemes.
 All statutory Towns as per census 2011 will eligible for coverage under this scheme.
Beneficiary:
The beneficiary family will comprise Husband, wife and unmarried children. An adult
earning member (irrespective of marital status can be treated as a separate
household)
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Age limit:
Maximum 70 years at the end of repayment (as applicable for regular housing scheme)
Loan Amount: As per eligible amount based on the income norms
Margin:
Loan Amount Margin
Up to Rs.30 lakh 10%
Above Rs 30lakh and up to Rs75 lakh 20%
Above Rs.75 lakh 25%
Disbursement of Loan:
Disbursement to be made not more than 4 instalments depending upon progress of
construction as subsidy will be released to the Bank by NHB in maximum 4 instalments.
Take home Pay: 40% norms to be satisfied (in case of husband and spouse, if both are
employed ,40% norms to be seen only in case of prime borrower and net income of
spouse shall be added to arrive at repayment capacity and fix quantum of loan)
Credit linked subsidy scheme
Parameter CLSS for Economically Weaker CLSS for middle income group
section/Low income group
EWS LIG MIG I MIG II
ANNUAL Up to Rs. 3 lakh Above Rs3 lakh Above Rs.6 lakh Above Rs12 lakh
HOUSEHOLD and upto Rs.6 and upto Rs.12 and up to Rs.18
INCOME(Rs per lakh lakh lakh
annum)
Annual income furnished above should not be exceeded to be eligible under this scheme
Interest 6.5% 6.5% 4% 3%

subsidy(% per
annum)
Maximum loan 20years 20years 20years 20years

tenure
considered for
interest subsidy
Loan tenure can be more as per our scheme up to 30years,but for subsidy
calculation, the tenure is restricted as 20years or tenure of the loan
whichever is lower.
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Eligible housing Rs.6 lakh Rs.6lakh Rs.9 lakh Rs.12 lakh
loan amount for
interest subsidy
The amount shown here is the amount up to which the loan is eligible for
subsidy. However the actual loan can be more as per eligibility.
Dwelling Unit 30 sq. m 60 sq. m 160 sq. m 200 sq. m

Area(area
enclosed within
walls)
The beneficiary, at his/her discretion, can build a house of larger area but
interest subvention would be limited to the eligible housing loan amount
for interest subsidy based on the category
Processing Rs.3000/- Rs.3000/- Rs.2000/- Rs.2000/-

Charges per
sanctioned
application up
to eligible
amount will be
paid by NHB
Actual processing charges above the eligible loan amount for subsidy,
should be charged and recovered from the borrower
Requirement of obtention of NOC: To ensure that beneficiaries do not take advantage of

more than one component of Govt Schemes Bank should take NOC from State/UT Govt
or designated agencies of the State/UT for the list of beneficiaries being given benefits
under credit linked subsidy.
Balance transfer-case of non-eligibility:
In case of borrower has taken housing loan and availed interest subvention under the
scheme but later on switches to another bank, such beneficiary will not be eligible or
claim benefit of interest subvention again.
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Financial Inclusion
1. Financial Inclusion :
Financial inclusion may be defined as the process of ensuring access to financial
services and timely and adequate credit where needed by vulnerable groups
such as weaker sections and low income groups at an affordable cost.
Financial Inclusion, broadly defined, refers to universal access to a wide range of
financial services at a reasonable cost. These include not only banking products
but also other financial services such as insurance and equity products.
The essence of financial inclusion is to ensure delivery of financial services which
include - bank accounts for savings and transactional purposes, low cost credit
for productive, personal and other purposes, financial advisory services, insurance
facilities (life and non-life) etc
2. Steps to ensure Financial Inclusion-
a) Basic Savings Bank Deposit Accounts (BSBDAs) for all individuals with the facility of
debit card,
b) Kisan Credit cards (KCCs):- Under this scheme banks issue smart cards to the
farmers for providing timely and adequate credit support from single window
banking system for their farming needs.
c) General Purpose Credit Cards (GCC) - under this approach bank also fulfill Non-
farm entrepreneurial credit requirement of individuals (e.g. Artisan Credit card,
Laghu Udyami Card, Swarojgar Credit Card, Weaver‟s Card etc)
d) Business Facilitators (BFs)/Business Correspondents (BCs):- In this model the
intermediaries or BC/BFs are technologically empowered by the banks to provide
the last mile delivery of financial products and services. This module enables
providing banking facility at door step through smart card , aadhaar based
payment system.
e) Granting Overdraft facilities in SB accounts Granting Overdraft facilities in SB
accounts
3. TOD in basic Small Savings SB accounts: In order to meet financial commitments

of such SB account holders, branch Managers are vested with discretionary
powers to grant overdraft of not more than Rs.10000/- (Rupees Ten Thousand only)
which should be adjusted within a maximum period of Sixty Days.
4. Business Correspondent :The following organisations / individuals can be enlisted
as BCs:
a. Individuals like retired bank employees, retired teachers, retired
government employees and ex-servicemen, individual owners of kirana I
medical /Fair Price shops, individual Public Call Office (PCO) operators,
agents of Small Savings schemes of Government of India/Insurance
Companies, individuals who own Petrol Pumps, authorized functionaries of
well run Self Help Groups (SHGs) which are linked to banks, any other
individual including those operating Common Service Centres (CSCs).
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b. NGOs/ MFls set up under Societies/ Trust Acts and Section 25 Companies.
c. Cooperative Societies registered under Mutually Aided Cooperative
Societies Acts/ Cooperative Societies Acts of States/Multi State
Cooperative Societies Act.
d. Post Offices.
e. Companies registered under the Indian Companies Act, 1956 with
large and widespread retail outlets.
f. Non-Deposit taking Non-Banking Financial Companies (NBFCs-ND).
g. Dak Sevak[post man]
h. Bank Sakhi[SHG member]
i. Anganwadi workers.
j. Asha workers.
5. Scope of activities of Business Correspondents
Functions / Services: In addition to the activities listed under Business
Facilitators model the scope of activities of Business Correspondent will
include the following;
a. Disbursal of small value credit.
b. Recovery of principal / collection of interest.
c. Collection of small value deposits.
d. Sale of micro insurance / mutual fund products / pension products / other third
party products, subject to the regulations by the concerned authorities (like
Securities Exchange Board of India, Insurance Regulatory Development Authority,
Association of Mutual Funds of India etc) and Reserve Bank of India.
e. Receipt and delivery of small value remittances / other payment instruments.
f. Banks are allowed by RBI to include distribution of banknotes and coins also in the
scope of activities which may be undertaken by BCs.
 The activities to be undertaken by the BCs would be within the normal course of
the bank's banking business, but conducted through the Business Correspondents
at places other than the bank premises/ATMs.
6. Security Deposit and Letter of Agreement for BC

 Branches need not insist on any caution deposit for CC Smart account limit up to
₹ 50,000/-. For limit above ₹ 50,000/- upto Rs 1.00 lac , a separate indemnity bond
should be obtained and caution deposit should be insisted equal to limit fixed
over and above Rs 50000/- which may collected through opening of recurring
deposit.
7. Other Terms and Conditions:
a) The distance between work place of BC and the Base Branch has been
dispensed with. There is no distance criteria between work place of BC
and the Base Branch in respect of villages allotted by SLBC/DCC.
b) A separate Cash Credit account under "CC Smart scheme" (under GL Code
33 sub head code 33011) will be opened by the branch in the name of
approved BC for routing all smart card based operations of customers.
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After opening CC account, Branch should inform ITD, CO/TCS for tagging
the account with terminal and merchant id given by the service provider
c) No interest should be charged as the CC Smart account serves as a transit
account.
d) No Cheque book should be given for the CC Smart account.
e) The maximum Cash-on-hand limit of the Business Correspondent is
Rs.1,00,000/under Regional Manager's discretion. The limit will be
enhanced by the respective Regional Head on a case to case basis after
getting specific request from the concerned Branch and examination of
the request carefully.
f) Before commencement of Smart Card Banking at the terminal, the BC may
be given a sum (say Rs.10,000/-) to the debit of CC Smart account to
enable withdrawals.
g) BC should remit cash into his Transit account at the branch as decided by
the Branch or whenever the cash on hand exceeds the prescribed limit.
h) Before engaging, Police Verification for all the BCs to be made.
i) CIBIL report must be generated before engaging BCs
j) Statement on details of Engagement of BCs I Replacement of BCs /
Termination of BCs during the month must be put up to the Regional Head
and copy to be submitted by the Regional Offices to Financial Inclusion Dept.,
Central Office by 5th of the subsequent month for information, extension of
insurance coverage, monitoring and followup.
k) Along with this statement monthly review of BCs and CC-Smart account
reconciliation to be submitted.
l) Inspection: Surprise inspection at BC points must be done by branches and by Fl
Nodal officers/ officials I executives from ROs.
m) Confirmation on closure of CC smart accounts must be ensured where BC s are

terminated.
n) CC Smart account must be reconciled and before termination I replacement
this account must be brought to NIL
o) confirmation of fixing of limits for CC-Smart accounts where limits are yet to be
fixed
p) Details of loan availed by BCs and their relatives should be revied.
q) random check on availability of cash in hand and with the smart account to
avoid any misuse of funds by BCs.
r) All the KYC related issues are to be taken care of and the full details of
correspondence from application to the engagement are to be preserved for a
minimum period of 10 years.
s) Engagement of BC details to be added in HBCM menu and Terminated BC details
to be deleted in HBCM menu then and there.
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8. Due Diligence: In line with the elaboration on "Due Diligence" by RBI, our Bank
will have to conduct due diligence on the proposed BFs/BCs covering various
aspects such as
 Reputation/market standing,
 Financial soundness,
 Education – Minimum Class 10th Pass , and he /she should get certified from IIBF or
through some internal process from Regional Office / Staff College or through
online CSC.
 Management and corporate governance,
 Cash handling ability and
 Ability to handle hand held device
In respect of individuals to be engaged as BF /BC the place of residence
shall be near to the base village so that it will be convenient for them to
operate. Villages adjacent to the base village shall be covered by
tagging the service of BC for which Regional Office concerned should
obtain necessary permission from Central Office.
9. Security Deposit and Agreement (BF)
 No security deposit will be insisted upon.
 The execution of agreement as per Circular Misc/393/2018-19 dated
08.08.2018 must be done and every year renewal I review of the accounts
must be done by the branches and confirmation to this extent must be
obtained by all ROs and this confirmation must be sent to us on annual basis.
10. Uniform Dress: BCs should wear the uniform and identity card provided by Bank
11. Transactions through Smart Cards

 This is done through biometric Smart Cards and the PoS machines which get
linked to the central server through mobile connectivity
 Our Bank had launched a system of enabling the account holders to operate
their accounts at their own place without visiting the branches.
 M/s Tata Consultancy Services (TCS) Ltd is the service provider of our Bank.
 Account holders are issued Smart cards and BCs are issued master smart card
and POS by the service provider.
 Transactions are done by swiping through Hand Held Devices (small POS
machines) with the assistance of a Business Correspondent who receives or gives
cash under a prior arrangement with the Bank.
 The maximum transaction per account per card per day is pegged at
Rs.20000 with a minimum of Rs.50 at present.
 There is no limit on the number of centres at which such services can be provided.
Every centre will function like an extension counter run by an intermediary without
involving any bank staff.
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 The Business Correspondent can provide door step service by moving around or
operate from his own house/shop or sit in a common place like Panchayat Office
etc.
 He can receive or pay cash anytime during day or night as per mutual
convenience of himself and the account holder
 No license from RBI or any other authority is required
12. Rural Self Employment Training Institutes’ (RSETI).
As per the Directives of Ministry of Rural Development, GOI, Our Bank have
established Rural Self Employment Training Institutes (RSETls} in 12 Lead Districts
out of 13 (States of TN & Kerala} and one RSETI in non- Lead District (state of
TN) after obtaining approval of the Bank's Board. The main functions/purpose
of setting up RSETls is –
a) To provide intensive short-term residential self-employment training programmes
with free food & accommodation to rural youth for taking up self employment
initiatives and skill up gradation for running their micro-enterprises successfully.
b) To provide Handholding support to the trained youth for two years for
sustainability of micro enterprise including Credit Linkage.
c) To provide training which are demand-driven and after assessment of the
aptitude of the candidates.
d) To give priority to Rural youth who are "Below Poverty Line (BPL)" while selecting
the candidates.
MoRD, GOI, through National Center for Excellence of RSETls(NACER),

Bengaluru is allocating targets under Annual Action Plan (AAP) to each RSETI
and monitoring the performance of RSETls every year. The performance is
being reviewed periodically with Standard Operating Procedures (SOP}.
Grading Exercise is being done by NACER at the end of every Financial Year
and the respective Grades will be awarded by MoRD to RSETls, after
scrutinizing the same.
NABARD is giving funding assistance to RSETls which secures "A/ AA" rating and
NRLM { National Rural Livelihood Mission) is giving assistance to RSETI which secures
minimum "B" grade and for trainees who are below poverty line.
13. Financial Literacy Centres (FLCs)

Reserve Bank of India, formulated a Model scheme for Financial Literacy and
Credit Counselling Centres (FLCCs) on 04.02.2009 and advised Banks to set up
FLCCs in conformity with the Model scheme. The broad objective of the FLCCs is
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to provide free financial literacy/education and credit counselling. The FLCCs will
not act as investment advice centre. The specific objectives of the FLCCs are:
 To provide Financial counselling services through face to face interaction as well

as through other available media.
 To educate people in rural and urban areas with regard to various financial
products and service available from the financial sector.
 To make the people aware of the advantages of being connected with the
formal financial sector.
 To formulate debt restructuring plans for borrowers in distress and recommend the
same to formal financial institutions.
Till date , with the due approval of Board of Directors, our Bank has set up 23
FLCCs, in the name and style “SNEHA”. FLCCs of our Bank were named as
“SNEHA” which means friendship primarily and also means affection, tenderness,
love etc. Our Bank has setup, 14 FLCCs in Tamil Nadu under District Level Concept
and 9 FLCCs in Kerala under Block Level Concept.
Our FLCC, known as SNEHA, will be headed by a Counsellor. People with domain
knowledge in agriculture for counseling related to agriculture and allied activities
may be appointed as counselors. He should have sound knowledge of banking,
law, finance, requisite communication and team building skills etc. As FLCCs are
expected to play a crucial role in assisting and guiding the distressed individual
borrowers it is necessary that only a well-qualified Counsellors are selected to man
the centre on a full time basis.
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KISAN CREDIT CARD (KCC) SCHEME
 The Kisan Credit Card has emerged as an innovative credit delivery

mechanism to meet the production credit requirements of the farmers in
a timely and hassle-free manner.
 All KCCs are Smart Card cum Debit Cards.
 The scheme is implemented in association with National Payment

Corporation of India Ltd
 These cards should be enabled for use at ATMs, Point of Sale (PoS)
Terminals at Merchant Establishments and Micro ATMs with Business
Correspondents.
 ATM enabled Rupay Kisan Card are issued to all the new KCC accounts
A. Objectives/Purpose
Kisan Credit Card Scheme aims at providing adequate and timely credit
support from the banking system under a single window to the farmers for
their cultivation& other needs as indicated below:
I. Short Term credit limit portion
a. To meet the short term credit requirements for cultivation of crops
b. Post harvest expenses
c. Produce Marketing loan
d. Consumption requirements of farmer household
e. Working capital for maintenance of farm assets and activities allied

to agriculture like dairy animals, inland fishery etc.
II. Long Term Credit limit portion
Investment credit requirement for agriculture and allied activities

like pump sets, sprayers, dairy animals etc.
B. Eligibility
a. All Farmers – Individuals / Joint borrowers who are owner cultivators
b. Tenant Farmers, Oral Lessees & Share Croppers
c. SHGs or Joint Liability Groups of Farmers including tenant farmers, share

croppers etc.
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C. ixation of credit limit/Loan amount
Limits are to be fixed separately for Farmers Other than marginal farmers
and depend on crop pattern.
I. Farmers other than Marginal farmers:
1. For farmers raising single crop in a year
a. The short term limit to be arrived for the first year:
Scale of finance for the crop (as decided by District Level Technical
Committee) x Extent of area cultivated + 10% of limit towards post-
harvest/ household / consumption requirements + 20% of limit towards
repairs and maintenance expenses of farm assets + crop insurance,
PAIS & asset insurance.
b. Limit for second & subsequent year:
First year limit for crop cultivation purpose arrived at as above plus 10%
of the limit towards cost escalation /increase in scale of finance for
every successive year ( 2nd , 3rd, 4th and 5th year) and estimated Term
loan component for the tenure of Kisan Credit Card, i.e., five years.
2. For farmers raising more than one crop:
 Short term credit: The limit is to be fixed as above depending upon the
crops cultivated as per proposed cropping pattern for the first year
and an additional 10% of the limit towards cost escalation / increase
in scale of finance for every successive year (2nd, 3rd, 4th and 5th
year). It is assumed that the farmer adopts the same cropping pattern
for the remaining four years also. In case the cropping pattern
adopted by the farmer is changed in the subsequent year, the limit
may be reworked.
 Term loans for investments towards land development, minor irrigation,

purchase of farm equipments and allied agricultural activities. The
banks may fix the quantum of credit for term and working capital limit
for agricultural and allied activities, etc., based on the unit cost of the
asset/s proposed to be acquired by the farmer, the allied activities
already being undertaken on the farm, the bank’s judgment on
repayment capacity vis-a-vis total loan burden devolving on the
farmer, including existing loan obligations
 The long term loan limit is based on the proposed investments during
the five year period and the bank’s perception on the repaying
capacity of the farmer
17
D. Maximum Permissible Limit: The short term loan limit arrived for the 5th year
plus the estimated long term loan requirement will be the Maximum
Permissible Limit (MPL) and treated as the Kisan Credit CardLimit.
Fixation of Sub-limits for other than Marginal Farmers:

Short term loans and term loans are governed by different interest
rates. Besides, at present, short term crop loans Up to Rs.3 lakh are
covered under Interest Subvention Scheme/Prompt Repayment
Incentive scheme. Further, repayment schedule and norms are different
for short term and term loans. Hence, in order to have operational and
accounting convenience, the card limit is to be bifurcated into separate
sub limits for short term cash credit limit cum savings account and term
loans.
Drawing limit for short term cash credit should be fixed based on the
cropping pattern and the amounts for crop production, repairs and
maintenance of farm assets and consumption may be allowed to be
drawn as per the convenience of the farmer.
In case the revision of scale of finance for any year by the district level
committee exceeds the notional hike of 10% contemplated while fixing
the five year limit, a revised drawable limit may be fixed and the farmer
be advised about the same.
In case such revisions require the card limit itself to be enhanced (4th or
5th year), the same may be done and the farmer be so advised.
For term loans, installments may be allowed to be withdrawn based on

the nature of investment and repayment schedule drawn as per the
economic life of the proposed investments.
It is to be ensured that at any point of time the total liability should be

within the drawing limit of the concerned year.
Wherever the card limit/liability so arrived warrants additional security,

the branches may take suitable collateral as per our bank norms
II. For Marginal Farmers:
A flexible limit of Rs.10,000 to Rs.50,000 be provided (as Flexi KCC) based

on the land holding and crops grown including post-harvest warehouse
storage related credit needs and other farm expenses, consumption
needs, etc., plus small term loan investments like purchase of farm
equipments, establishing mini dairy/backyard poultry as per assessment of
Branch Manager without relating it to the value of land.
18
The composite KCC limit is to be fixed for a period of 5 years on this basis.
Wherever higher limit is required due to change in cropping pattern and/or
scale of finance, the limit may be arrived at as explained for other farmers.
Disbursement Short
term Credit
The short term component of the KCC limit is in the nature of revolving
cash credit facility. There should be no restriction in number of debits and
credits.
The drawing limit for the current season/year could be allowed to be

drawn using any of the following delivery channels.
a. Operations through branch
b. Operations using Cheque facility
c. Withdrawal through ATM / Debit cards

d. Operations through Business Correspondents and ultra thin branches
e. Operation through PoS available in Sugar Mills/ Contract farming

companies etc., especially for tie-up advances
f. Operations through PoS available with input dealers
g. Mobile based transfer transactions at agricultural input dealers and

mandies.
Long term credit
The long term loan for investment purposes may be drawn as per
installment fixed.
E. Validity /Renewal
The Kisan Credit Card should be valid for 5 years subject to an annual
review.
The review may result in continuation of the facility, enhancement of the

limit or cancellation of the limit / withdrawal of the facility, depending
upon increase in cropping area / pattern and performance of the
borrower.
19
When the bank has granted extension and/or re-schedulement of the
period of repayment on account of natural calamities affecting the
farmer, the period for reckoning the status of operations as satisfactory or
otherwise would get extended together with the extended amount of
limit.
When the proposed extension is beyond one crop season, the aggregate
of debts for which extension is granted is to be transferred to a separate
term loan account with stipulation for repayment in installments.
The scheme provides fixation of scale of finance for the first year and
subsequent increase for every successive year. Therefore documentation
will be done only for maximum limit so that there is no need for fresh
documentation during the validity of account.
Within the sanctioned limits the withdrawal limit may be fixed each year
as per the scale of finance. The maximum limit can be up scaled on the
basis of approximate future need but not above 125% of the present
need.
The DPN and related documents should be taken for such higher amount
but actual disbursement will be as per current need
Rate of Interest(ROI):
 ROI will be linked to MCLR Rate

F. Repayment Period:
The repayment period may be fixed by banks as per the anticipated

harvesting and marketing period for the crops for which a loan has been
granted.
The Term loan component will be normally repayable within a period of 5

years depending on the type of activity / investment as per the existing
guidelines applicable for investment credit.
Financing Banks, may at their Discretion, provide Longer Repayment

period for Term Loan depending on the type of Investment.
G. Margin:
For crop loans, no separate margin need be insisted as the Margin is in-built
while fixing the Scales of Finance. For term loan component, our existing
margin norms will be followed.
20
H. Security:
Security will be applicable as under:
Hypothecation of crops up to card limits of Rs. 1.60 lakh as per the extant
RBI guidelines.
With tie-up for recovery: Branches may consider sanctioning loans on

hypothecation of crops up to card limit of Rs.3.00 lakh without insisting on
collateral security for the Sugar mill tie up loans.
For short term production credit, collateral security may not be insisted
up to aggregate loan limit of Rs.3.00 lakhs for the existing- agriculture
borrowers with satisfactory track record of 2 years in our Bank
I. Other features:
The KCC holder should have the option to take benefit of Assets
Insurance, Personal Accident Insurance Scheme (PAIS), and Health
Insurance (wherever product is available and have premium paid
through his KCC account). Necessary premium will have to be paid on
the basis of agreed ratio between bank and farmer to the insurance
companies from KCC accounts.
No Processing fee should be charged up to a card limit of Rs.3.00 lakh.
Pradhan Mantri Fasal Bima Yojana (PMFBY)
Objective of the Scheme:
Pradhan Mantri Fasal Bima Yojana (PMFBY) aims at supporting sustainable

production in agriculture sector by way of
Coverage of Farmers:
All farmers who have been sanctioned Seasonal Agricultural Operations

(SAO) loans from Financial Institutions (FIs) (i.e. loanee farmers) for the
notified crop(s) season would be covered compulsorily.
The Scheme is optional for both loanee and non-loanee farmers.
Coverage of Crops
I. Food crops (Cereals, Millets and Pulses),
II. Oilseeds
21
III. Annual Commercial / Annual Horticultural crops.
In addition for perennial crops, pilots for coverage can be taken for those
perennial horticultural crops for which standard methodology for yield estimation
is available.
Coverage of Risks and Exclusions:
Prevented Sowing/Planting/Germination Risk: Insured area is prevented

from sowing/ planting/germination due to deficit rainfall or adverse
seasonal/weather conditions.
Standing Crop (Sowing to Harvesting): Comprehensive risk insurance is
provided to cover yield losses due to non-preventable risks, viz. Drought,
Dry spell, Flood, Inundation, widespread Pests and Disease attack,
Landslides, Fire due to natural causes ,Lightening, Storm, Hailstorm and
Cyclone.
Post-Harvest Losses: Coverage is available only upto a maximum period
of two weeks from harvesting, for those crops which are required to be
dried in cut and spread / small bundled condition in the field after
harvesting against specific perils of Hailstorm, Cyclone, Cyclonic rains and
Unseasonal rains.
Localized Calamities: Loss/damage to notified insured crops resulting from
occurrence of identified localized risks of Hailstorm, Landslide, Inundation,
Cloud burst and Natural fire due to lightening affecting isolated farms in
the notified area.
Add-on coverage for crop loss due to attack by wild animals: The States
may consider providing add-on coverage for crop loss due to attack by
wild animals wherever the risk is perceived to be substantial and is
identifiable. The add-on coverage will be optional for the farmers and
applicable notional premium will be borne by the farmer, however the
State Govts may consider providing additional subsidy on this coverage,
wherever notified.
General Exclusions: Losses arising out of war and nuclear risks, malicious
damage and other preventable risks shall be excluded.
State Govts./UTs ,in consultation with SLCCCI, can exclude any of the
aforesaid perils listed above which is not prevailing in their State/UT
Yield loss damage for localised calamities and post harvest losses will be
assessed on the basis of individual insured farm level and hence lodging
of loss information by farmer/designated agencies is essential. For
remaining risks losses are due to widespread calamities. Hence lodging of
information for claims by insured farmers / designated agencies for such
wise spread calamities is not essential. Claims will be calculated based on
22
the loss assessment report/average yield submitted by concerned State
Govt.
Submission of UID (AADHAAR) by farmer: Aadhaar has been made mandatory
for availing Crop insurance from Kharif 2017 season onwards.
DRI Scheme
Eligibility criteria
a. The annual income ceiling for eligibility to borrow under DRI scheme is
Rs. 24000 per family in urban and semi-urban areas and Rs. 18000 in
rural areas.
b. He/she should not own any land or the size of the land holding should
not exceed 1 acre in the case of irrigated land and 2.5 acres in the
case of un-irrigatedland.
c. Members of SC/STs are eligible for the loan irrespective of their land
holdings provided they satisfy the other criteria.
The maximum loan amount per beneficiary under the scheme should
not exceed Rs. 15,000/- for working capital / term loan depending on
the nature and need of the activity and
The limit of the Housing Loan isRs.20,000/-.
Members of SCs / STs satisfying the income criteria of the scheme can
also avail of housing loan up to ₹ 20,000/- per beneficiary over and
above the individual loan of ₹ 15,000/- available under the scheme.
Banks have been advised by RBI to grant to eligible borrowers

belonging to SCs / STs such advances to the extent of not less than 2/5th
(40 percent) of total DRI advances.
At least two third of DRI advances should be granted through rural and
semi-urban branches.
23

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Priority sector Guidelines

Export Credit (not applicable to RRBs and LABs):

vocational courses, not exceeding 20 lakh will be

Loans currently classified as priority sector will continue till

HOUSING *Loans to individuals up to Rs.35.00 lakh in metropolitan

* The housing loans to banks’ own employees will be

*Loans up to ₹10 lakh in metropolitan centres and up to ₹6

*Bank loans to any governmental agency for

*Bank loans for affordable housing projects using at least

*Bank loans to HFCs (approved by NHB for their refinance) for

like solar based power generators, biomass-based power

Categories Primary Urban Co-operative Bank

Objective: For generation of employment opportunities through establishment of micro

 Any individual, age above 18 years,

Quantum and nature of finance assistance:

Nature of finance: can be CC, Term loan or Composite loan

KVIC will remain as single national level nodal agency

SCHEME FOR REHABILITATION OF MANUAL SCAVENGERS(SRMS)

 Scheme launched under prohibition of employment as Manual Scavengers and

 Full amount of loan shall be disbursed including amount of subsidy

Loan Amount Margin

Up to Rs.30 lakh 10%

Above Rs 30lakh and up to Rs75 lakh 20%

Above Rs.75 lakh 25%

Credit linked subsidy scheme

EWS LIG MIG I MIG II

Interest 6.5% 6.5% 4% 3%

Maximum loan 20years 20years 20years 20years

Dwelling Unit 30 sq. m 60 sq. m 160 sq. m 200 sq. m

Processing Rs.3000/- Rs.3000/- Rs.2000/- Rs.2000/-

Requirement of obtention of NOC: To ensure that beneficiaries do not take advantage of

3. TOD in basic Small Savings SB accounts: In order to meet financial commitments

6. Security Deposit and Letter of Agreement for BC

m) Confirmation on closure of CC smart accounts must be ensured where BC s are

11. Transactions through Smart Cards

MoRD, GOI, through National Center for Excellence of RSETls(NACER),

13. Financial Literacy Centres (FLCs)

 To provide Financial counselling services through face to face interaction as well

 The Kisan Credit Card has emerged as an innovative credit delivery

 All KCCs are Smart Card cum Debit Cards.

 The scheme is implemented in association with National Payment

I. Short Term credit limit portion

a. To meet the short term credit requirements for cultivation of crops

b. Post harvest expenses

c. Produce Marketing loan

d. Consumption requirements of farmer household

e. Working capital for maintenance of farm assets and activities allied

II. Long Term Credit limit portion

Investment credit requirement for agriculture and allied activities

a. All Farmers – Individuals / Joint borrowers who are owner cultivators

b. Tenant Farmers, Oral Lessees & Share Croppers

c. SHGs or Joint Liability Groups of Farmers including tenant farmers, share

I. Farmers other than Marginal farmers:

1. For farmers raising single crop in a year

a. The short term limit to be arrived for the first year:

b. Limit for second & subsequent year:

2. For farmers raising more than one crop: