Lok Sabha Question No. 1402 (UNSTARRED), answered on 2020-02-11
Subject: Outstanding Loans under KCC Scheme
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Meenakashi Lekhi

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.1402

TO BE ANSWERED ON THE 11 TH  FEBRUARY, 2020

## OUTSTANDING LOANS UNDER KCC SCHEME

1402.   SHRIMATI MEENAKASHI LEKHI:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether it has been found that loans provided under Kisan Credit Card (KCC) scheme are becoming a significant part of NPAs for banks, especially SBI and if so, the steps taken by the Ministry to understand the rise in such NPAs, the details thereof;
- (b) whether any study has been carried out to probe further the farmers' inability to repay loans and if so, the details thereof, if not, the reasons therefor;
- (c) the total amount of outstanding loans under KCC from 2016-19; and
- (d) the  steps  taken  by  the  Ministry  to  address  this  issue  and  also  to  develop  alternative models/schemes  which  addresses  the  problems  of  banking  sector  and  also  provide  credit assistance to farmers and the details thereof?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी (SHRI NARENDRA SINGH TOMAR)

- (a) to (d):      As reported by RBI, the total outstanding Gross Non-Performing Assets (GNPAs) for Agriculture and allied activities in respect of scheduled commercial banks including SBI as on 31.03.2019 is Rs.1,11,851 crore.

Failure  of  crops  due  to  natural  Calamities  like  drought,  flood,  cyclone  etc  impair  the farmer's capacity to repay loans. An Internal Working Group constituted by RBI had indicated an increase in NPA level for those States that announced farm loan waiver programmes in 20172018 and 2018-2019.

NABARD had conducted a study on KCC. The major findings of the study revealed that with the support of 2% Interest Subvention to banks and 3% incentive on prompt repayment, all the farmers in the districts taken up under the Study were able to generate some gain over non KCC  farmers.  Amount  of  loan  outstanding  with  respect  to  KCCs  issued  by  all  scheduled Commercial Banks, Cooperative Banks and RRBs in all the States/UTs for the years, 2016-17, 2017-18 and 2018-19 is as under:

(Rs. In Crore)

| Financial year   | Amount Outstanding   |
|------------------|----------------------|
| 2016-17          | 6,49,621.93          |
| 2017-18          | 6,68,322.63          |
| 2018-19          | 7,09,586.87          |

The  Government  has  taken  many  steps  to  alleviate  the  problems  faced  by  farmers regarding  issues  of  KCC.  Processing  fee,  inspection,  ledger  folio  charges  and  all  other service charges for short term crop loans upto Rs.3.00 lakh have been waived off. Collateral fee loan limit for short term agri-credit has been raised from Rs.1.00 lakh to Rs.1.60 lakh. Government  has  introduced  KCC  scheme  for  Animal  Husbandry  and  Fisheries  farmers. Benefit  of  Interest  Subvention  Scheme  has  also  been  extended  on  KCC  for  animal husbandry and fisheries farmers' upto loan limit of Rs.2 lakh per farmer so as to reduce the burden of interest component on farmers and provide hassle free short term working capital loans to them. To bring the maximum number of farmers under KCC in order to provide loan to them at a cheaper rate under the Interest Subvention Scheme (ISS), Union Government has  launched  a  campaign  to  saturate  the  farmers  with  KCC  through  financial  institutions including Commercial Banks, Cooperative Banks and Regional Rural Banks in collaboration with  the  State  Governments  and  State  level  Bankers  Committees  (SLBSs).  Government had  formulated  a  detailed  strategy  and  shared  it  among  the  participating  agencies  to  be adopted for making the campaign successful, which includes issue of simplified standard application  form  and  KCC to  be  issued  in  a  time-bound  manner  within  14  days  from  the state or receiving of completed form. The Government has also launched a special drive to bring all PM KISAN beneficiaries under the KCC scheme. All short term loans except those overdue at the time of natural calamity are eligible for restructuring and converted into term loans with repayment period upto 2 or 5 years depending on degree of crop loss. Also to provide  relief  to  the  farmers  affected  by  severe  natural  calamities,  the  Government  has decided  that  interest  subvention  of  2%  per  annum  will  be  available  for  first  three  years/ entire period (subject to a maximum of five years) on the restructured loan amount, and in all such cases the benefit of prompt repayment incentive at 3% p.a. shall also be provided to the affected farmers.

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