BANK BRANCH AUDIT - KCC AUDIT IN SBI

KCC (Crop Production Loan) in SBI:

1. It is revolving cash credit account. 

1a. The eligiblility of limit is decided on the basis of MPBF(Maximum Permissible Bank Finance) based on SoF (Scale of Finance).

2. Rate of intt is 

-7% for limit upto 3L. 

-9% or rate as decided for limit >3L

3. Secuity is 

-Primary:Hyp. of standing crops & Mortgage of Agri. Land.

-Collateral: needed only for limits >3L

4. Bank pays insurance on behalf of farmers under PMFBY for all eligible crops to get them insured.

5. Intt subvention is eligible 

-@2% at the time of disb. 

-@3% for prompt repayment borrowers who hv taken limit upto 3L.

6. Crop Wise annual income(scale of finance) rates per hectares/acre are already decided by bank/SLBC and MPBF is calculated using this parameter and multiplying the same with bollowing farmers land holdings. The amt is further added by 10% for post harvest exp.+20% for farm maint. 

7. To calculate above MPBF, SBI uses a specialised software.

8. Tenure of KCC will be for 5 years. During 5 yrs, limit will be increased annually @10% of first yr limit decided on MPBF for every successive yr till 5th yr.

9. Farmers eligible for KCC are into 3 categories as per their size of land holdings. 

-Marginal farmers are with LH upto 1 hectares. 

-Small farmers are with LH >1hect to 2hectares (equal to 5 acres)

-Other farmers with LH >2hect or >5 acres

10. SHGs are a group of small n marginal farmers only.

11. Repayment due date for short term crops: 

     11.1 rabi season: 2 crop seasons from date of disbursement.

     

     11.2 kharif season: 2 crop seasons from date of disbursement.

     

     11.3 rabi 2 seasons normally are:

     -start in oct to harvest in march

     -start in may to harvest time in nov

 

     11.4 kharif season normally are:

     -start in oct to harvest in march

     -start in may to harvest time in nov

12. Repayment due date for long term crops like sugarcane, banana etc. is normally max 1 yr from date of sanc. n disb. of limit.

13. Repayment is satisfied only wn acc. is credited in full and balance is nil. Borrower is allowed to borrow the same amt on same day for nxt yr prod. of crops.

14. Npa date will be wn above repayment due date remains over due for 2 more seaons in rabi n kharif and 1 season in long term crops. 

15. Suppose If limit is drawn for rabi or kharif on 01.10.2017 n it remains unpaid or short paid, the date of npa will be 30.09.2020. Taking into 1 seasons for harvest, market n collection, further 2 seasons for due payment & 2 seasons wait for overdue. 

16. But to be on lill safer side and get rid of any dispute wd branch officials, we can consider overall period of non repayment from date of disb. abt 3 years, they will agree for sure for this period. An SBI circular on KCC accepts 3 years maximum as overdue period.

17. If the farm area or land has been subject to drought or flood, demand for such circular from branch to ensure the farmers eligible for benefit of same.

18. *Probability of MOC cases:*

-short term acc. not converted to kcc., Thus looding intt subven. benefits.

-Not eligible for 3+3 moratorium.

-no full credit till expiry of overdue dt.

-intt subvention gvn but not eligible

-prompt subvention wrongly claimed, not paid in a year from disb. or not paid from genuine sources.

-reversal of penal intt, simple unrealised intt

-short or excess charge of intt in acc.

-Intt parameters fed wrong or not updated

-repayment not from genuine sources

-amt disbursed n end used for other purpuses

-wrong classified, to be D1 from Sub std

-worng classified, to be D2/D3 from std/sub due to wrong dt of npa.

-borrowerwise not classified

-T&C of restructuring not complied as per rbi cir.

-intt sub. Claim gvn but not a KCC acc.