Kisan Gold Scheme


1. PURPOSE:

a)Productive purpose (production and investment credit) related to agriculture and allied activities. (At least 75% of the limit).
b)Rural Housing related activities e.g. construction/purchase of new house, purchase of plot for construction of house, repair/ renovation/extension of existing house, providing sanitary latrine, toilet, bathroom, drinking water facility, etc.
c)Consumption loan e.g. marriage, education, religious/family function, medical expenditure, consumer goods, car, two wheelers, etc.

2. Sub Limit:

25% of the overall limit or Rs 5 lakh which ever is lower may be given for non productive purposes which may comprise of maximum of Rs. 3 lakh for Rural Housing and maximum of Rs. 2 lakh for consumption. The apportioning of non productive loan between housing and consumption loan may be as per the requirement of the borrower. However, the restriction of maximum of Rs. 3 lakh for rural housing and Rs. 2 lakh for consumption loan will be maintained.

3. ELIGIBILITY:

I. Only existing good agricultural land owner borrowers who have been continuously availing of any loan and having no NPA record for last Two years as on the date of application will be eligible. New farmers with evidence of satisfactory dealing with other banks for a minimum period of 2 years will also be eligible. If the land mortgaged is in the name of more than one farmer then all will be eligible jointly.

II. The above condition of track record of 2 years may be relaxed in case of new farmers having good amount of deposit for the last 2 years provided: Loan is secured by 100 % liquid collateral security like Deposit/ NSCs, etc,

or

Loan is secured by 50 % liquid collateral security and 50% by mortgage of land (valued at 50 % of Bank Loan for Small/ Marginal farmers and 75% of Bank Loan for other farmers)

4. EXTENT OF LOAN: Maximum Rs.20 lakh

(i) Loan limit will be the lowest of:

(a) 5 times average annual (2 years) total income of the borrower.

(b) 50% of value of land to be mortgaged. Value of land may be done on the basis of current Circle rate/market rate whichever is lower.

(ii) Total income will include income from agriculture and allied activities and nonfarm activities.

(iii) If the number of borrowers is more than one then the sum total of their income will be considered.

(iv) Minimum 75% of the limit should be sanctioned for productive purposes.

(v) 25% of the loan amount or Rs 5 lakh, whichever is lower may be given for non productive purposes. Out of this maximum of Rs. 3 lakh for rural housing activities and Rs. 2 lakh for consumption purposes may be sanctioned.

(vi) The land taken from the relatives or friends including relatives or friends on oral tenancy basis may be included while reckoning the credit requirement of the farmer, provided the collateral security is sufficient to cover the total limit as per bank’s guidelines.

(vii) Only consumption loan will not be sanctioned.

5. Nature of Loan:

(i) Entire limit of Rs 20 lakh may be allowed as cash credit limit for crop production, consumption needs (other than housing) & working capital for allied activities subject to restrictions as detailed in item no. 3(IV) &3(V) above.

(ii) Need based term loan within overall ceiling of Rs 20 lakh including cash credit limit mentioned above & loan maximum up to Rs 3 lakh for Rural Housing. To encourage investment credit there will be no upper ceiling on investment loan.

6. RURAL HOUSING LOAN:

(i) If the land for which the house related loan is to be given is in the name of spouse then spouse will be co-borrower.

(ii) Maximum age limit at the time of sanction of loan may be 60 years. Applicants above 60 years but maximum 65 years may be considered for sanction of loan if all the legal heir join as guarantors. Page 5 of 9

(iii) Required approval from competent authority for plan, etc., will have to be obtained.

(iv) Other requirements of Bank’s Housing Loan Scheme are to be fulfilled.

7. SECURITY NORMS:

(i) Primary Security: Hypothecation of assets created with bank loan.

(ii) Collateral Security: Mortgage of land valued at 200 % of loan amount along with primary security, if any.

(iii) Value of land may be done on the basis of current Circle rate/market rate whichever is lower.

(iv) The prevalent procedure of verifying the fact that the bank’s charge has been noted by the Patwari in the related revenue records should be followed by the branches. In case of new farmers having good amount of deposit for the last 2 years, security will be as under:

(i) Loan is secured by 100 % liquid collateral security like Deposit/ NSCs, etc, or Loan is secured by 50% liquid collateral security and 50% by mortgage of land (valued at 50 % of Bank Loan for Small/Marginal farmers and 75% of Bank Loan for other farmers).

8. MARGIN :

a)Extent of MarginaUpto Rs.2 lakh Nil

b) Above Rs.2 lakh & above 10% For cash credit limit Borrower’s stake may not be insisted in cash. Cost of family labour and inputs of the farmer may be treated as borrower’s stake. However, for term loans margin may be maintained as stipulated above.