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United Bank Of India Kisan Credit Card 2024, Overview, Interest Rates & Eligibility

Overview

United Bank of India offers the Kisan Credit Card (KCC) with the name United Bank Kisan Credit Card. It is a unique Scheme that aims at providing adequate, hassle-free and timely credit support from the banking system under a single window to the farmers for their cultivation & other needs.

Objective

  • The short term credit requirements for cultivation of crops
  • Post harvest expenses
  • Produce marketing loan
  • Consumption requirements of farmer household
  • Working capital for maintenance of farm assets and activities allied to agriculture, like dairy animals, inland fishery etc.
  • Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals etc.

Eligibility

  • All Farmers - Individuals / Joint borrowers who are owner cultivators
  • Tenant Farmers, Oral Lessees & Share Croppers
  • SHGs /JLGs of Farmers including tenant farmers, share croppers etc.
  • Illiterate and blind persons intending to avail of this facility may be allowed after taking proper safeguard against misuse and tampering
  • Maximum Age limit at the entry point for an individual is 70 years. However, in case of individuals 70 years of age, Kisan Credit Card may be issued with joint borrowers /co-loanee having age of less than 70 years.

Credit Limit

  1. All farmers other than marginal farmers:
    • For first year: farmers raising single crop in a year(scale of finance*area cultivated +10% of limit towards post-harvest/house hold/consumption needs+ 20% of limit towards repairs and maintenance expenses of farm assets + crop insurance, PAIS and asset insurance.
    • For subsequent years: First year limit plus 10% of the limit towards cost escalation/increase in scale of finance for every successive year and estimated term loan for the tenure of kisan credit card.
    • In case revision of scale of finance for any year by the DLTC exceeds the notional hike of 10%, a revised drawable limit may be fixed and the farmer is advised about the same. Term loans Investments.
    • Term Loan is provided towards investment in land development, minor irrigation, purchase of farm equipments and allied agricultural activities. The quantum of credit for term and working capital limit for agricultural and allied activities, etc., is worked out 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, and 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.
    • 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 Card Limit.
    • Fixation of Sub-limits: The card limit is bifurcated into separate sub limits for short term cash credit limit cum savings account and term loans, due to difference in interest rates, repayment schedule and norms.
  2. 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. The composite KCC limit is to be fixed for a period of five years on this basis.

Margin

  • For Short term crop loans: No separate margin need to be insisted as the Margin is in-built while fixing the Scales of Finance
  • For term loan component: Presently for loan up to Rs. 1 lakh margin requirement is NIL and for loan above Rs. 1 lakh -15-25%
  • For term loan component, margin will be decided as per the guidelines of RBI from time to time

Security

  • Upto Rs. 1,00,000: Hypothecation of crops/ goods
  • Above Rs. 1,00,000 to Rs. 3,00,000: Hypothecation of crops/ goods and charge/mortgage of land by way of declaration as per prevailing agriculture credit operation act of the concern state and third party guarantee acceptable to the bank
  • Above Rs. 3,00,000: : Hypothecation of crops/ goods and charge/mortgage of land by way of declaration as per prevailing agriculture credit operation act of the concern state and third party guarantee acceptable to the bank & tie-up for recovery

Documentation

  • D.P. Note for the sanctioned limit
  • Loan Agreement/ sanction letter duly accepted by the borrower
  • Letter of continuity
  • Hypothecation of crop / assets to be created out of bank loan
  • If the sanctioned limit is more than Rs.1 lakh then mortgage of land or third party guarantee
  • Consent letter in respect of disclosure of name in case of default

Interest Rate

The rate of interest will be linked to base rate of the bank .This will be guided by the extant guide lines of the bank. However, if Government supported interest subvention is provided for any component of the limit, the rate of interest may be fixed accordingly. At present, rate of interest for production credit for raising short term crop under interest subvention scheme up to the limit of Rs. 3 lakhs is 7% p.a.

Insurance

The coverage under PAIS is also compulsory for all KCC holders. The premium payable under the scheme is to be shared by the issuing Branch and the KCC holder in the ratio of 2:1.

Validity

The credit card will be valid for 5 years subject to annual review.

Repayment

  • The repayment within due dates fixed by the bank for Kharif - 31st March & Rabi - 30th September
  • 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

Disbursement

Disbursement to be effected through various delivery channels, including ICT driven channels like ATM/ PoS/ Mobile handsets.

Processing Fee

No processing fee upto a limit of Rs. 3 lakhs.

What is Personal Accident Insurance Scheme (PAIS) for KCC Holders?

Personal Accident Insurance Scheme (PAIS) is an accident insurance scheme especially designed for KCC holders. NABARD has, in consultation with the representatives of insurance companies, bankers and Govt. of India, finalised the Personal Accident Insurance Scheme for KCC holders, for uniform implementation by banks throughout the country. It was introduced on 14 June 2001.

It covers risk of KCC holders against:

  • Death (or)
  • Permanent Disability

Death (within 12 months of the accident) or permanent disability should be resulting from accidents caused by external, violent and visible means.

It gives following risk covers:

  1. Death due to accident (within 12 months of the accident) caused by outward, violent and visible means: Rs 50,000
  2. Permanent total disability: Rs.50,000
  3. Loss of two limbs or two eyes or one limb and one eye: Rs.50,000
  4. Loss of one limb or one eye: Rs.25,000

KCC holder has the option to take benefit of Accident Insurance (including PAIS) whose premium has to be paid by him through his KCC account. Premium payable Rs.15/- for a one year policy while Rs.45/- for a 3-year policy. Premium has to be borne by farmers/bank according to the terms of the Scheme. To avail this insurance cover, the applicant should not be over 70 years of age at the time of availing the Kisan Credit Card

 

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