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e-Circular

ABU-PRODUCT DEVELOPMENT AND MANAGEMENT DEPARTMENT. Sl. No. : 391/2012 - 13 Circular No. : NBG/ABU/PDM-KCC/6/2012 - 13 Thursday,July 19,2012. 28 Aashadh, 1934(s).

The Chief General Manager, State Bank of India, Local Head Office, All circles. ABU/PD&M/ Cir- 7 / 2012-13 Dear Sir / Madam, AGRI Business: Revised Kisan Credit Card (KCC) Scheme Please refer to Master Circular No. ABU/PD&M/TDP/01 dated 30.03.2009 on crop production loans. 2. RBI has revised the Kisan Credit Card (KCC) scheme with a view to simplify and attune the scheme to suit to current requirements and advised banks to implement the revised Kisan Credit Card (KCC) scheme. Based on the guidelines issued by RBI / GOI, it has been decided to implement the Revised KCC Scheme as under: A. Eligibility: i. All farmers-individuals/Joint borrowers who are owner cultivators. ii. Tenant farmers, Oral lessees and Share Croppers etc. iii. SHGs or Joint Liability Groups of farmers including tenant farmers, share croppers etc., B. Fixation of Limit: Short term credit limit is fixed for the first year depending upon
i. the crops cultivated as per proposed cropping pattern & scale of finance ii. post harvest/household/ consumption requirements and iii. Maintenance expenses of farm assets, crop insurance, Personal Accident

14th July, 2012

Insurance Scheme (PAIS) and Asset insurance.


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iv. For every successive years (2nd, 3rd, 4th, and 5th year), the limit will be stepped up @10%.(short term credit limit sanctioned for 5th year will be about 150% of the first year limit allowed to farmers). v. Investment credit requirement of small value in the nature of farm implements/ equipments etc (like sprayer, plough etc.,) and repayable within a period of one year will be included while fixing KCC limit (This portion of the credit will not be included for automatic step up during 2nd year to 5th year but credit requirement for this portion in each year will be reckoned for arriving at the maximum drawal limit for the respective year). vi. The short term loan limit arrived for the 5th year as in (iv) plus estimated investment loan requirement as in (v) (highest among the five years) above will be

the Maximum Permissible Limit (MPL) and sanctioned as the Kisan Credit Card Limit.
vii. Short term loan limit assessed for the first year or for the 2

to 5th year plus the estimated investment credit limit required, as in (iv) and (v) above, will be the Maximum Drawal Limit (MDL) allowed in the account, for the particular year. Rs.10,000/- to Rs.50,000/- based on the land holding and crop grown + small term loan investments, (repayable in one year) without relating to the value of land.

nd

viii. Marginal farmers will be sanctioned a composite limit (as Flexi KCC limit) of

C. Collateral Security: i. Collateral security is waived for 1. KCC limit of up to Rs.1 lac 2. KCC limit up to Rs.3 lacs for loans with tie-up arrangement for recovery. ii. Maximum Permissible Limit (sanctioned KCC limit) has to be considered for the purpose of fixing collateral security requirement. Exception: The branch may permit the borrower to bring the collateral security, based on Maximum Drawl Limit (MDL), where the borrower is unable to provide the required full collateral security for Maximum Permissible Limit at the time of sanction, provided the drawing limit does not require collateral security during the year. iii. At the time of annual review/ renewal of KCC, branches shall invariably take care of the collateral security requirements. D. Repayment: i. Each withdrawal should be allowed to be liquidated in 12 months, without the need to bring the debit balance in the account to zero at any point of time. However, no withdrawal in the account should remain outstanding for more than 12 months. ii. If any withdrawal is not liquidated within 12 months, the borrower will not be eligible for further withdrawals. E. Interest rate:
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Rate of interest for KCC account is based on the Maximum Drawal Limit (not on Maximum Permissible Limit). Short term production credit loans for limit up to Rs 3 lacs are eligible for interest subvention and are presently charged interest @7% up to the repayment period for a maximum period of 12 months (as per GOI directives). Card rate is applicable thereafter.

F. Nature of account: KCC will be in the nature of revolving account. Credit balance in the account, if any, to fetch interest at Savings bank rate. G. Validity period of KCC Limit: Validity period of KCC limit will be 5 years, subject to annual review. Branches shall, therefore, ensure to obtain revival letters before expiry of 3 years wherever applicable, as per the Limitation Act. H. Processing charges: i. Processing charges waived for KCC limit up to Rs.3 lacs. ii. For KCC limit above Rs.3 lacs, processing charges will be recovered on the basis of Maximum Drawing Limit (and not on Maximum Permissible Limit) for each year. I. Disbursements of loan limit through ATM cum Debit card:
i. KCC borrowers shall be issued an ATM cum Debit card (State Bank Kisan

Card), to enable them to withdraw from KCC accounts from ATMs of our SBI group, in addition to the disbursements at branches.
ii. Capability of the existing ATM linked State Bank Kisan Card will be enhanced

for usage at other delivery channels also, viz. PoS/ BC/ BF channel etc., J.Conduct of the limit:
i. Withdrawals in the account shall be allowed in KCC account up to the

Maximum Drawal Limit (MDL) fixed for the year.


ii. Maximum Drawal Limit (MDL) will be valid for 12 months. iii. KCC Limit will be reviewed after 12 months and revised limit (stepped up by

10%, if there is no change in the acreage and cropping pattern) will be fixed as the MDL for the next year. Simple declaration on the crops raised / proposed shall be obtained from the borrower from the second year onwards.
iv. The review may result in continuation of the facility, enhancement of the limit or

cancellation of the limit, withdrawal of the facility, depending upon the cropping area / pattern and conduct of the account.
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v. Similar review and assessment of limit is to be made at the beginning of every

year till 5th year.

vi. In case the Maximum Permissible Limit (KCC limit) itself is to be enhanced on

account of revisions in scale of finance, change in cropping pattern in the subsequent years etc the same shall be done by way of new sanction, after fulfilling other formalities. All other terms and conditions of KCC scheme remain unchanged. 3. Details of revised guidelines vis--vis extant guidelines and Illustrations on assessment of KCC limit are furnished in Annexure A and B respectively. 4. Documentation: Requisite new clauses and amendments in the existing clauses to be incorporated in Hypothecation Agreement (AB 1 & AB 1-Sim) / arrangement letter on account of the above modifications are given in Annexure 3. Specimen of the amended Hypothecation Agreement (AB 1& AB 1-Sim) and Arrangement letter duly incorporated with the changes is given as Annexure D. 5. Circles may advise the Circle Stationery Department for incorporation of the amendments in the loan documents as above. Till the amended Hypothecation Agreement / arrangement letters are made available at the branches, branches may be advised to incorporate the necessary changes in the Hypothecation Agreement and Arrangement letter, by affixing stamps in indelible ink, . 6. Please arrange to advise all branches to sanction the new KCC loans and renewal of existing KCC loans as per the revised guidelines with immediate effect. Further, all KCC borrowers shall be issued an ATM cum Debit card (State Bank Kisan Card). Please arrange accordingly. Yours faithfully,

Chief General Manager (Rural Business)


Encl: as above

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Annexure: A REVISED KISAN CREDIT CARD SCHEME S No 1 Parameters Eligibility Extant guidelines i) Owner cultivators, tenant cultivators , share croppers and oral lessees ii) Agricultural borrowers having good track record for the last 2 years iii. Credit worthy new farmers can also be financed. of Based on a. Production limit: Scale of finance for the crop * extent of area cultivated b. working capital for allied agricultural activity c. 20% of the limit for crop production expenses and working capital for allied activities as contingency credit d. Ancillary credit requirements. Revised guidelines i. All farmers-individuals/Joint borrowers who are owner cultivators ii. Tenant farmers, Oral lessees and Share Croppers etc iii. SHGs or Joint Liability Groups of farmers including tenant farmers, share croppers etc. A. Other than Marginal farmers KCC limit (Maximum Permissible Limit) shall be sanctioned based on the short term loan requirements and Investment credit requirement

Fixation limit

of small value in the nature of farm implements/ equipments etc


Components of short term loan: i. ii. iii.

the crops cultivated as per proposed cropping pattern & scale of finance and post harvest/household/ consumption requirements and Maintenance expenses of farm assets, crop insurance, Personal Accident Insurance Scheme (PAIS) and Asset insurance.

Components of Investment credit for the purpose of sanction as KCC limit:

step up during 2nd year to 5th year but credit requirement for this portion in each year will be reckoned for arriving at the maximum drawal limit for the respective year).
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Investment credit requirement of small value in the nature of farm implements/ equipments etc (like sprayer, plough etc.,) and repayable within a period of one year will be included while fixing KCC limit (This portion of the credit will not be included for automatic

iv. and 5
th

@10%.(short term credit limit sanctioned for 5th

For every successive years (2nd, 3rd, 4th, year), the limit will be stepped up

year will be about 150% of the first year limit allowed to farmers). v.

The short term loan limit arrived for the 5 year as in (iv) plus estimated investment loan requirement as in (v) (highest among the five years) above will be the Maximum Permissible Limit (MPL) and sanctioned as the Kisan Credit Card Limit.
th

Maximum Drawal Limit:


vi.

Short term loan limit assessed for the first year or for the 2nd to 5th year plus the estimated investment credit limit required, as in (iv) and (v) above, will be the Maximum Drawal Limit (MDL) allowed in the account, for the particular year.

B. Marginal farmers:
A flexible limit of Rs. 10,000 to Rs. 50,000 be provided as Flexi KCC based on crops grown including post harvest, warehouse storage related credit needs and other farm expenses, consumption needs + small term loan investments like purchase of farm equipment, establishing mini dairy/back-yard poultry without relating to value of land fixed for a period of 5 years 3 Collateral security No collateral for limit upto Rs 1 i. Collateral security is waived for lac a. KCC limit of up to Rs.1 lac Additionally, our bank issued b. KCC limit up to Rs.3 lacs for loans with tie-up guidelines to waive collateral arrangement for recovery. security for farmers with regular repayment for last 3 years and for ii. Maximum Permissible Limit (sanctioned KCC limit) has to be considered for the purpose of loans under tie-up for a limit fixing collateral security requirement. upto Rs 2 lacs Exception: The branch may permit the borrower to bring the collateral security, based on Maximum Drawl Limit (MDL), where the borrower is unable to provide the required full collateral security for Maximum Permissible Limit at the time of sanction, provided the drawing limit does not require collateral security during the year.

iii. At the time of annual review/ renewal of KCC, branches shall invariably take care of the
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collateral security requirements.


4 of Short term production credit loans for limit upto Rs 3 lacs are eligible for interest subvention and are charged interest @7% till a maximum repayment period of 12 months. Card rate is applicable beyond 12 months. Repayment Repayment schedule for crop loans should coincide with the time when majority of the cultivators would have harvested and sold their produce. The due date of payment of a loan should be fixed after giving a reasonable period of say 2 months after harvesting of crops for marketing the produce. Nature of Revolving KCC account account Validity Rate interest Rate of interest for KCC account is based on the Maximum Drawal Limit (and not on Maximum Permissible Limit).

Each withdrawal under short term sub- limit should be allowed to be liquidated in 12 months without the need to bring the debit balance in the account to Zero at any point of time. No withdrawal in the account should remain outstanding for more than 12 months

KCC will be in the nature of revolving account. Credit balance in the account will be eligible for interest at savings bank rate. KCC limit is valid for 3 years, KCC Limit is valid for 5 years, subject to annual review. Branches shall, therefore, ensure to obtain subject to annual review.

revival letters before expiry of 3 years wherever applicable, as per the Limitation Act.

Processing charges

i. No fees for limit upto Rs 25000/ii. Above Rs 25000- upto Rs 2 lacs : Rs 500/iii. Above Rs 2 lacs : 0.30% of the loan amt. Max Rs 30 lacs. Revolving cash credit based on sowing crop season. Operation through branch / ATM

i. Processing charges waived for KCC limit up to Rs.3 lacs. ii. For KCC limit above Rs.3 lacs, processing charges will be recovered on the basis of Maximum Drawing Limit (and not on Maximum Permissible Limit) for each year.
i. KCC borrowers shall be issued an ATM cum

Disbursement

Debit card (State Bank Kisan Card), to enable them to withdraw from KCC accounts from ATMs of our SBI group, in addition to the disbursements at branches.
ii. Capability of the existing ATM linked State

Bank Kisan Card will be enhanced for usage at other delivery channels also, viz. PoS/ BC/ BF channel etc.,

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Annexure B ILLUSTATIONS ON ASSESSMENT OF KCC LIMIT: A. Small Farmer raising Multiple Crops in a year 1. Assumptions: A. Land holding: 2 acres B. Cropping Pattern: Paddy - 1 acre (Scale of finance plus crop insurance per acre: Rs.11000) Sugarcane - 1 acre (Scale of finance plus crop insurance per acre:Rs.22,000/-) C. Investment/Allied Activities repayable in one year period (like purchase of farm implement) to be purchased in 4th year = Rs.10,000/2. (i) Crop loan Component Cost of cultivation of 1 acre of Paddy and 1acre of Sugarcane (11,000+22,000) : Rs.33,000 (a) Add: 10% towards post harvest/household expense/consumption: Rs. 3,300 (b) Add: 20% towards farm maintenance: Rs. 6,600 Maximum Drawing Limit for 1st year : = Rs. 42,900 (a+b+c)

Loan Limit for 2nd year Add: 10% of the crop loan limit towards cost escalation/increase in scale of finance (10% of 42900 i.e 4300) : Rs. 4,300 = Rs. 47,200 Maximum Drawing Limit for 2nd year : Rs 47,200 Loan Limit for 3rd year Add: 10% of the limit towards cost escalation/increase in scale of finance (10% of 47200 i.e., 4700): Rs. 4,700 = Rs. 51,900 Maximum Drawing Limit for 3rd year : Rs 51900 Loan Limit for 4th year Add: 10% of the limit towards cost escalation/increase in scale of finance (10% of 51900 i.e 5200): Rs. 5,200 = Rs. 57, 100 (a) Purchase of farm equipment = Rs 10,000 (b) Maximum Drawing Limit for 4th year = Rs 67,100 (a+b) Loan Limit for 5th year
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Add: 10% of the limit towards cost escalation/increase in scale of finance (10% of 57100 i.e 5700): Rs. 5,700 = :Rs. 62,800 Say:Rs.63,000. Maximum Drawing Limit for 5th year : Rs 63,000 Kisan Credit Card (KCC) Limit (Maximum Permissible Limit ) : Rs 67100 Illustration II
Other Farmer raising Multiple Crops in a year 1. Assumptions: Land Holding: 10 acres Cropping Pattern: Paddy- 5 acres (Scale of finance plus crop insurance per acre Rs.11,000) Followed by Groundnut - 5 acres (Scale of finance plus crop insurance per acre Rs.10,000) Sugarcane - 5 acres (Scale of finance plus crop insurance per acre Rs.22,000) Investment loan repayable in 1 year : Rs 50000 to be purchased in 2nd year. 2. Crop loan Component Cost of cultivation of 5 acres of Paddy, 5 Acres of Groundnut and 5 acres of Sugarcane : Rs.2,15,000 (a) Add: 10% towards post harvest/household expense/consumption: Rs. 21,500 (b) Add: 20% towards farm maintenance : Rs. 43,000 (c )

Maximum Drawing Limit for 1 year :


nd

st

Rs.2,79,500 (a+b+c)

Loan Limit for 2 year Add: 10% of the limit towards cost escalation/increase in scale of finance (10% of 2,79,500 i.e., 27,950) : Rs.27,950 Rs.3,07,450 Add: Investment limit (repayable in one year) Rs 50,000 nd Maximum Drawing Limit for 2 year Rs 3,57,450. Loan Limit for 3 year Add: 10% of the limit towards cost escalation/increase in scale of finance (10% of 3,07,450 i.e., 30,750) : Rs.30,750 Rs.3,38,200 rd Maximum Drawing Limit for 3 year Rs 3,38,200 Loan Limit for 4 year Add: 10% of the limit towards cost escalation/increase in scale of finance (10% of 338200 i.e., 33,800) : Rs.33,800 Rs.3,72,000 th Maximum Drawing Limit for 4 year Rs 3,72,000 Loan Limit for 5th year Add: 10% of the limit towards cost escalation/increase in scale of finance (10% of 3,72,000 i.e., 37,200) : Rs.37,200 Rs.4,09,200 Say Rs.4,09,000 Maximum Drawing Limit for 5th year Rs 4,09,000
th rd

Kisan Credit Card (KCC) Limit (Maximum Permissible Limit)


Illustration III.

Rs 4,09,000

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Marginal Farmer raising Single Crop in a year (Flexi KCC) 1. Assumptions: 1. Land holding: 1 acre 2. Crops grown: Paddy (Scale of finance plus crop insurance per acre: Rs.11,000) 3. There is no change in Cropping Pattern for 5 years 2. Assessment of Card Limit: First year: Crop loan component: (cost of cultivation of 1 acre of Paddy ) : Rs 11,000 Add: 10% towards post harvest/household expense/consumption : Rs. 1,100 Add: 20% towards farm maintenance : Rs. 2,200 Total Crop Loan limit for 1st year : Rs.14,300 (A 1) 1st Year KCC Limit : (A1) + (B) : Rs.14300----(A1) 2nd year crop loan component: (A 1) plus 10% of crop loan limit (A1) towards cost escalation/ increase in scale of finance [14,300+(10% of 14300= 1430)] : Rs.15,730A2 Rs 15,730. 2nd year KCC limit : A2 3rd year crop loan component: Crop loan component: A2 plus 10% of crop loan limit (A2) towards cost escalation/ increase in scale of finance [15,730+(10% of 15730= 1570)] : Rs.17,300..A3 Add: purchase of backyard poultry (repayable in 1 year) Rs 5,700 ----B 3rd Year Composite KCC Limit : A3+B ( 17,300+5,000) : Rs.23,000 4th year crop loan component: A3 plus 10% of crop loan limit (A3) towards cost escalation/ increase in scale of finance [17,300+(10% of 17300= 1730)] : Rs.19,030..A4 4th Year KCC Limit : A4+B ( 19,030) : 5th year crop loan component: A4 plus 10% of crop loan limit (A4) towards cost escalation/ increase in scale of finance [19,030+(10% of 19,030= 1,900)] : Rs.20,930..A5 5th Year Composite KCC Limit : A5 ( 20,930) : Maximum Permissible Limit KCC Limit : Rs.20,930 Say Rs.21,000 Rs.23,000 Rs.19,030

NOTE: All the above costs estimated are illustrative in nature. The recommended scale of finance / unit costs may be taken into account while finalising the credit limit.

Annexure C AMENDMENTS IN SECURITY DOCUMENTS A. Hypothecation Agreement: (AB 1-Sim )


Clause 2 .c. (new)
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Kisan Credit Card limit has been assessed for 5 years, stepping up of the limit assessed for the first year @ 10% from 2nd, 3rd , 4th and 5th years., at Rs --------New Clauses to be incorporated (next to clause 9)
Clause 10

The borrower agrees to provide mortgage security as and when required.


Clause 11(new clause to be incorporated)

The borrower agrees that the Kisan Credit Card limit is valid for five years, subject to annual review. Clause 12 (presently it is clause 10) B. Hypothecation Agreement AB -1
Clause 9 (amendment to the existing clause) The borrower shall also provide a suitable third party guarantee and / or Mortgage, as and when required.

C. Letter of Arrangement Clause a. Purpose: Kisan Credit Card limit has been assessed for 5 years, stepping up of the limit assessed for the first year @ 10% from 2nd, 3rd , 4th and 5th years., at Rs --------Clause b. utilization: addition: disbursement schedule for Kisan Credit Card (KCC) 1st Year: Rs 2nd Year: Rs 3rd Year: Rs th th 5 Year: Rs 4 Year; Rs
Clause e. Interest:
Addition:

Interest will be paid by the bank @ Savings Bank rate on credit balances in KCC accounts. Clause i. General: i. ii. (new- to be incorporated) Collateral Security in the form of mortgage should be provided as per the extant instructions of the bank. (amended) All legal expenses such as lawyers fees, registration charges, etc. should be borne by you. Further, processing charges will be charged each year on the drawl limit. Clause vii. (new- to be incorporated) KCC limit will be valid for 5 years, subject to annual review.

iii.

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Annexure D AB-l
HYPOTHECATION AGREEMENT (To be stamped as per the State Stamp Act) The State Bank of India ______________________ THIS AGREEMENT made at ___________ this day __________ of _______________________ in favour of State Bank of India constituted under the State Bank of India Act,1955 and having its Corporate Centre at Mumbai and a Branch, among other places, at __________________ (hereinafter called "the Bank" which expression shall include its successors and assigns) by (*) Shri/Smt. _____________________________ (name of the borrower / co borrowers), son of/wife of/daughter of___________________________(address) of ___________________________, Shri/Smt. ____________________________ (name of the borrower / co borrowers) son of/wife of/daughter of ____________________________(address) of __________________________, Shri/Smt. _________________________________name of the borrower / coborrowers) son of/wife of/daughter of __________________________address)of _________________________ (* Here enter the name(s) of the borrower(s) / co-borrowers in sequence) (hereinafter referred to as the "the Borrower(s) which expression shall unless the context or subject otherwise requires include his/their heir(s), executor(s)and administrator(s), assigns jointly and severally). WHEREAS at the request of the borrower as contained in his/their application dated ___________ the Bank has agreed to grant/granted to the borrower(s) from time to time upon the terms and conditions stated hereinafter and as stipulated in the First Schedule, application form and/ or sanction letter and other schedule(s) hereto which form part of this agreement. (a) Cash Credit at anyone time up to the limit of Rs. ______________________ (Rupees _____________________________________ only) (b) Overdrafts at anyone time to the extent of Rs. _________________________(Rupees ____________________________________ only) (c) Demand Loans at anyone time for Rs. _______________________________ (Rupees
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____________________________________ only) (d) Term loans at any time of Rs. ____________________________________ (Rupees ____________________________________ only) (e) Other credit facility at any time of Rs. _____________________________ (Rupees _____________________________________only) (hereinafter collectively and individually referred to as the loans) for the purpose of facilitating finance to the borrower (s) for :

NOW IN CONSIDERATION of the Bank having granted / agreed to grant the loan(s), the Borrower(s) hereby agree, undertake and declare: -1. That each and all of the borrower's/ (borrowers'), present and future i. Crop whatsoever and wherever raised or to be raised including standing crops on the land described in the Second Schedule hereto or cut or stocked or stored or in course of transit or delivery; Herd/ fish/ flock/ silkworms and cocoons including those described in the Third Schedule hereto wherever they may be; Tools/ equipments/ fixtures/ boats/ machines/ tractor/ powertiller / tube well/ electric motor / diesel engine and/ or other movables connected with and relating to farming/rearing of cattle and/ or flock/ fishing/ sericulture including those described in the Fourth Schedule hereto wherever they may be;

ii.

iii.

iv. Receivables and investments, movable assets and valuables (All or any of items detailed in (i) to (iv) above hereinafter referred to as "the security".) SHALL BE AND STAND HYPOTHECATED to the Bank by way of first charge as security for the loans and also for all indebtedness or liabilities of the Borrower(s) to the Bank together with all interest, commissions, costs, charges and expenses payable to or incurred by the Bank including those for the enforcement of any of the security(ies). 2. The loan(s) will be disbursed/has/have been disbursed by the bank to the borrower(s) in instalments or in one lump sum.

3. This agreement shall operate as a security to the Bank in addition to any other security, if any, already held by the Bank for the repayment to the Bank on demand of the balance due to the Bank by the borrower at any time or ultimately on the closing of the said Accounts up to the aggregated amount of Rupees ______________________ (Rs.___________ ). The expression "the balance due to the Bank" in this and subsequent claims of this Agreement shall be taken to include the principal moneys from time to time due on the said Account(s) whether demanded or not and also all interest(s) including additional interest, penal interest/commission charges, interest tax, liquidated damages by whatever name called, calculated from day to day in a manner and at the rate hereinafter mentioned and the amount of all costs (between Attorney and Client), charges and expenses of the Bank which the Bank may have paid or incurred in any way in connection with the hypothecated goods and other assets including the sale and disposal thereof and any other sum that is hereunder declared as debitable to the accounts and interest thereon.
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4. That the Borrower(s) shall pay interest on the loans to be calculated on the daily balances in the loan account(s) with monthly/quarterly/half yearly /yearly or other rests according to the practice of the Bank and as per the guidelines as applicable issued by RBI from time to time as may be applicable at the rate of _____% above/below the Base Rate/ SBAR/SBMTLR rising and falling therewith or at such other rate as may be decided by Bank from time to time, with a minimum of _____% per annum. 4 (a) The borrower shall also pay interest on service/incidental and other charges to be calculated with monthly/quarterly/half early/yearly/rests according to the practice of the Bank. Provided that the Bank shall at any time and from time to time be entitled to change the rate of interest and such revised rate of interest shall always be construed as agreed to be paid by the Borrower(s) and hereby secured. Borrower(s) shall be deemed to have notice of change in the rate of interest whenever the changes in Base Rate / SBAR/SBMTLR displayed/notified at/by the branch/published in newspaper/made through entry of interest charged in the pass book/ Statement of accounts sent to the borrower(s). Further, without prejudice to the Bank's other rights and remedies, the /bank shall be entitled to charge at its own discretion enhanced rates of interest on the outstandings in the loan account(s) or a portion thereof or for any default or irregularity on the part of the borrower(s) which in the opinion of the Bank warrants charging of such enhanced rates of interest for such period as the Bank may deem fit. 5. Borrower agrees that subsidy of Rs. _________ (Rupees ______________________________ ) to be provided by the Government, shall be kept in Term Deposit Account in his name for a minimum period of ___ years which would be adjusted towards loans as per the subsidy scheme.

7. That in the case of cash credit, overdraft and demand loan, the Borrower(s) shall on demand forthwith pay to the Bank the outstanding(s) owing to the Bank in respect of the loans inclusive of interest, commissions, costs, incidental and service charges etc. and other charges and expenses. However, in a case where for any reason cash credit or overdraft or demand loan is permitted by the bank at its absolute discretion to be repaid in instalments and on such terms as may be stipulated by the Bank, the security as held hitherto shall continue to be subsisting and the conditions as to term loans herein shall apply to the said loan subject to such changes as may be stipulated by the bank. The term loan will be repayable by instalments as stipulated in the Fifth Schedule hereunto attached. In the event of any default committed, the bank will have right to demand the entire amount of principal and interest thereon remaining due and outstanding which will become payable forthwith.

Event of default: In one or more of the following happenings, it would be treated as an event of default for this agreement:
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a. Any breach of the terms of this Agreement; b. Anyone or more instalment(s) are not paid on time; c. Interest has not been paid on due date. d. If any distress or execution is levied or issued upon or against any part of the property of the borrower and the same is not discharged or vacated within 14 days or if a receiver is appointed for the borrower(s)'s business or if any substantial part of the borrower(s)'s assets or business shall be deemed to be seized or any action by any Government or any other authority is instituted to suspend business or agricultural pursuit of the borrower(s). e. If the borrower(s) stops payment or ceases or decides to cease to carry on his/their business, agricultural pursuit or dispose of the whole or substantial part of his business or agricultural pursuit. f. If any other indebtedness or obligation is not discharged when due prior to or on the specified maturity thereof. g. If any information furnished by the borrower to the bank is found to be incorrect or incomplete in any material particulars. In the event of any default as above, the Bank shall have the right: a. To recover the entire dues, b. To suspend any withdrawal to be effected, c. Take possession of the security so created forthwith and d. Take any other action as it may deem fit for recovery of its dues and enforcement of its securities.

7. Lien: The bank shall have the right of lien and set off against any of the balances in the account of the borrower(s)/guarantor(s) in accordance with the provisions of this agreement and the law. The borrower will not create any charge over any property whether secured or unsecured except with the permission of the bank. The borrower shall not bank with any other Bank. The borrower shall not create any lien on the properties/goods hypothecated to the Bank. 8. The Borrower shall take all steps to get the hypothecated goods/vehicles etc. registered with the authorities immediately as may be required under the law and shall submit the proof of such registration to the Bank within 7 days from the date of the registration. 9. The Borrower shall also provide a suitable third party guarantee and / or mortgage security as and when required. 10. Right of possession: In the event of default, the bank will have a right to take over possession of the securities charged and sell them and recover its dues. The borrower hereby authorises the bank to act as their attorney / agents for all intents and purposes for effectual implementation of the aforesaid action. 11. Notice: Any information/communication given/made through post/courier at the address last known to the bank will be treated as sufficient service for all intent and purposes. The contents of the Agreement have been read over and translated into__________ (enter the name of the language) and explained to Borrower(s) andhe/they having understood the contents thereof subscribe(s) to these presents. IN WITNESS WHEREOF the borrower(s) has/have set his/their hand(s) to these presents on
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this the day and year first above written.

Place: Date :

Signature/Thumb Impression of Borrower(s) THE FIRST SCHEDULE (Referred to above)

Terms and Conditions 1. That the borrower(s) will at all times maintain a sufficient quantity and market value of the security to provide the necessary margins of security required by the bank wherever applicable. 2. That the borrower(s) shall not except in the normal course of business but subject to the powers of the bank herein contained, cut, remove/dispose of the security from the place(s) wherever normally they may be kept/preserved, stored without the prior written permission of the bank during the time any money herein mentioned shall remain outstanding. Such security, if so required by the bank, shall be immediately delivered to the bank 3. That the bank without being bound to do so or being liable for any loss on account thereof and without prejudice to the rights and remedies of suit or otherwise shall be entitled to: i) Without notice to the borrower(s) and at the borrower(s) risk and expense enter any place(s) where the security may be kept/stored and inspect, value, insure, dispose of and/ or take possession thereof. ii) Without prejudice to the foregoing on default of the borrower(s) in payment of any money hereby secured or on the non-performance of an obligation on the part of the borrower(s) or on the occurrence of any, circumstances in the opinion of the bank endangering the security, the Bank shall take possession or recover and/or sell by public auction or private contract or otherwise deal with the security and appropriate the proceeds of the outstanding loans. iii) Apply towards the outstanding loans and money in its hand belonging to the borrower(s) and to recover the balance if any, of the loans not withstanding that all or any of the security may not have been realised. iv) The Bank shall be entitled to settle compromise, submit to arbitration and deal with any manner with any rights, debts, and claims of Borrower relating to the security. 4. That all the securities are free and shall be kept free from any charge or encumbrance except those in favour of the Bank. 5. That the borrower(s) shall at all times keep such items of security as are of insurable nature, insured against loss or damage by fire and other risk as may be required by the bank and shall deliver to the bank all such policies. It shall be also lawful for but not obligatory upon the bank to insure by debit to the borrower(s) account(s) in respect of the security as are of insurable nature. The proceeds of such insurance shall at the option of the bank either be applied towards replacement of the security or towards the satisfaction of the bank's dues. 6. That the borrower(s) shall pay all charges and taxes statutory or otherwise in respect of the security. The bank may also without being bound to do so, pay all such charges and taxes at the cost of the borrower(s), by debit to the borrower(s) account(s) 7. That this agreement is intended to and shall operate as a continuing security for all loans indebtedness and liabilities of the borrower(s) to the bank at all times during the subsistence of the agreement notwithstanding
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a. The existence of a credit balance or "Nil" balance in the loan accounts at any time or any partial payment or fluctuation of accounts or b. Any loan or any part thereof have been repaid either after demand has been made by the Bank or otherwise or has not been so repaid on demand. 8. That if the borrower(s) be more than one individual each one or any of them is/are authorised and empowered by the other(s) of them to admit and acknowledge his/their liability to the bank by any payment into the account(s) or by way of express writing in any manner or otherwise and any such admission and acknowledgement of the liability by one or more of them shall be construed to have been made on behalf of each of them. 9. That the borrower(s) hereby gives his/their consent for the loans being recovered as a public demand/money in terms of any legislation relating to recoveries thereof, where such consent is necessary under any legislation.

Borrower(s) THE SECOND SCHEDULE referred to above: All the pieces or parcel of land as detailed hereunder (specify here for identification the details like survey number, village name etc.) Borrower(s) THE THIRD SCHEDULE referred to above: The herds/flock/fish catch/silk worms and cocoons, etc. short particulars whereof are given hereunder: Borrower(s) THE FOURTH SCHEDULE referred to above: The tools / equipment/ fixtures /boats / machines / tractor / power tiller / tubewell / electric motors/diesel engines and other movables connected with and relating to farming/ rearing of cattle and/ or flock/ fishing/ sericulture.

Borrower(s) THE FIFTH SCHEDULE referred to above: (Repayment programme for Term Loan granted) Due Date Amount of Due Date instalment

Amount of instalment

Borrower(s)

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AB 1- Sim HYPOTHECATION AGREEMENT (This agreement needs to be signed by the borrower(s) only at the bottom of the page) This Agreement executed this day_________ of _______ 200 __ in favour of the State bank of India constituted under State Bank of India Act, 1955 and having its Central Office at Mumbai and a Branch at _________ hereinafter called the Bank (which expression shall include its successors and assigns) by Shri/Smt. ________________ son of / wife of / daughter of ______________________residing at ________________________, Shri/Smt._____________________ son of / wife of / daughter of ______________________ residing at ____________________________ and Shri / Smt. ______________________son of / wife of / daughter of ______________________ residing at _________________________ (herein after referred to as the borrower(s) (which expression shall include his/her/their heirs, legal representatives, executors, administrators and assigns (as the case may be) jointly and severally). 2. WHEREAS at the request of the borrower(s) as contained in the application, a copy of which is enclosed, the Bank has granted/agreed to grant the following facilities. a. Crop Loan / Agricultural Cash Credit / Kisan Credit Card with a limit of Rs.________. b. Term Loan Limit of Rs.__________. c. Kisan Credit Card (KCC) limit has been assessed for 5 years, stepping up of the limit assessed for the first year @ 10% from 2nd, 3rd, 4th and 5th years, at Rs ---------. 3. In consideration of the premises, the borrower(s) hereby creates a first charge by way of hypothecation in favour of the Bank in respect of the crops including standing crops (present and future) on the lands described in the schedule hereunder and/or _____________________________ (asset financed under term loan (hereinafter referred as Security*)) with an intention to secure the cash credit / term loan facility. 4. The borrower(s) shall pay interest at the rate of __________ % above/below the State Bank of India Advance Rate in respect of the cash credit limit and at the rate of __________ % above/below State Bank of India Advance Rate for the term loan facility calculated on the daily balances in the said accounts with monthly/quarterly / half-yearly/yearly /or such other rest accordance with the practice of the Bank from time to time. 5. Bank will be entitled to change the rate of interest from time to time and in the case of default by the borrower as mentioned in the letter of arrangement, the Bank shall charge enhanced rate of interest, the said letter of arrangement dated _________ duly acknowledged by borrower(s) shall be read as part of this agreement. 6. In case of Term Loan and/or Agricultural Cash Credit Card /Crop Loan, the borrower(s) shall on demand forthwith pay to the Bank the outstanding(s) owing to the Bank in respect of the loans inclusive interest, commissions, costs, incidental and service charges, etc. and other charges and expenses. However, in a case where for any reason Agricultural Cash Credit or Kisan Credit Card or Crop Loan is permitted by the Bank at its absolute discretion to be repaid in instalments and on such terms as may be stipulated by the Bank, the security as created in favour of the Bank hitherto shall continue to be subsisting and the conditions as
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to term loans herein shall apply to the said loan subject to such charges as may be stipulated by the Bank. In case of term loan, it will be repayable in ________________ instalments of Rs.____________ (Rupees __________________________________ only) each and a final instalment of Rs.________________ (Rupees ________________________________ only) with a startup period of ____________ months. In the event of any default committed by the borrower(s), the Bank shall have right to demand the entire amount of principal and interest thereon remaining due and outstanding which will become payable forthwith. 7. In case of any default committed by the borrower(s), the Bank shall have right to enforce the security created hereunder and in the sanction letter. The borrower(s) hereby declares that the security charged to the Bank is free of encumbrances and he will pay all the taxes, statutory charges, etc. regularly to protect the security to make it enforceable. 8. This agreement and/or the security created hereunder is intended to and shall operate as a continuing security for all loans indebtedness and liabilities of the borrower(s) to the bank at all times during the subsistence of the agreement notwithstanding. a. The existence of credit balance or Nil balance in the loan account at any time or any partial payment of fluctuation of accounts or b. Any loans or any part thereof have been repaid either after demand has been made by the bank or otherwise or has been so repaid on demand. 9. The borrower(s) shall at all times keep such items of security as are of insurable nature, insured against loss or damage by fire and other risks as may be required by the Bank and shall deliver to the Bank all such policies. In the event of the securities created in favour of the Bank becomes insufficient, the Bank reserves the right to demand such additional securities as may be required. 10. The borrower agrees to provide Mortgage security as and when required. 11. The borrower agrees that the Kisan Credit Card (KCC) limit is valid for 5 years, subject to annual review. 12. That the contents of the Agreement have been reads over and translated into _____________ {vernacular languages of the borrower(s)) and he/she/they having understood the contents thereof subscribe (d) to these presents. SCHEDULE STATE: S no Extent (acres) Village DISTRICT: Boundaries (Survey Nos) North South West East

IN WITHNESS WHEREOF the borrower(s) has/have set his/her/their hand(s) to these presents on this the day and year first above written.
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Signature of Borrower/s

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LETTER OF ARRANGEMENT (This agreement needs to be signed by the borrower(s) only at the bottom of the page) Shri/Sarvashri, Smt._____________________ _______________________________________ Dear sir(s)/ Madam, AGRICULTURAL FINANCE: With reference to your application dated ___________ requesting grant of _________________ (herein specify the nature of loan applied for viz. Crop Loan, Term Loan etc.) we have pleasure in sanctioning ___________ (herein specify the type of loan) limit of Rs.________ (Rupees ____________________________ only) on the following terms and conditions. a. Purpose. The _____________________ (herein specify the type of loan) should be utilized for the specific purpose of __________________ (specify the exact purpose for which the financial assistance is sought) brief details of which are furnished below. i. ________________ ii. ________________ iii. _____________ Kisan Credit Card limit has been assessed for 5 years, stepping up of the limit assessed for the first year @ 10% from 2nd, 3rd , 4th and 5th years., at Rs ----------b. Utilisation The loan will be disbursed to you (herein called as borrower(s) or you) according to disbursement programme furnished below. (Give the disbursement programme as indicated in the documents). (other conditions attendant on the disbursement of the loan may also be specified viz.) 1. Disbursement schedule for Kisan Credit Card (KCC) limit: 2nd Year: Rs 3rd Year: Rs 1st Year: Rs 5th Year: Rs 4th Year; Rs 2. Disbursement towards civil works will be made on production or certified statements of expenditure duly countersigned by the borrower(s) / Agricultural Department of the ______________ and after personal inspection by the Bank Officials.

3. Disbursements towards purchase of machinery will be made either on receipt of machinery and installation thereof in the borrowers farm or against documents covering dispatch of machinery received through the Bank or by direct remittance to the suppliers on authorization by the borrower(s), after ascertaining in the latter case whether machines are ready for delivery. 4. Processing charges/ upfront fee amount of Rs-------- for the credit limit/ loan sanctioned should be paid by you before availing the limit/ loan from the bank. Inspection and other service charges as may be applicable to the loan should also be paid by you. The charges are subject to change from time to time as decided by the bank and will be effected prospectively, after giving public notice.
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c. Security i. Primary Security: (give brief particulars of property) Collateral : (hypothecated / pledged / mortgaged and value thereof). iii. Third party guarantee if any (Furnish the name of the guarantor). d. Documents: (Give Brief particulars of documents required to be executed by the Borrowers. e. Interest: Interest will be charged monthly/quarterly/half yearly as at the end of _________ or as on the dates the repayment instalments fall due, at the rate of _____________ % over/below Base Rate/ SBAR with a minimum of _________ p.a. rising and falling with the change in Base Rate / SBAR on the amount outstanding in the account. Enhanced rate of interest at 2% p.a. will be charged over and above the rate mentioned above in case of any default committed by the borrower(s) in respect of the conditions mentioned herein. Interest will be paid by the bank @ Savings Bank rate on credit balances in Kisan Credit Card (KCC) accounts. g. Repayment: This loan should be repaid as under: (give the details of repayment as stipulated in the documents). h. Insurance: (particulars of Insurance required to be taken on/waiver thereof to be advised herein). i. General: i. Collateral Security in the form of Mortgage should be provided, as per extant instructions of the bank. ii. All legal expenses such as lawyers fees, registration charges, etc. should be borne by you. Further, Processing charges will be charged each year on the Maximum Drawal Limit. iii. Original invoices, suppliers receipt for the cost of machinery and other connected correspondence should be deposited with the Bank. iv. The Assets charged to the bank should not be disposed of, sold or otherwise encumbered as long as the Bank loan remains unpaid. v. The Banks name board should be displayed prominently on the machines pledged/ hypothecated to the Bank. vi. The advance is also subject to the terms and conditions stipulated in the documents for the loan granted and also other conditions, if any, stipulated by the Bank from time to time. vii. KCC limit will be valid for 5 years, subject to annual review. viii. In the case of loans granted under the scheme approved by NABARD, we will pass on
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the commitment charges levied by NABARD to you if the failure on your part. a. to apply for refinance as per schedule or b. to get the scheme rephased is due to the failure on your part to draw the loan instalments from us as per schedule or to advice us to apply for rephasement(s) (in view of the anticipated delay in the implementation of the schemes) respectively. j. Events of Default: In one or more of the following happenings, it would be treated as an event of default committed by you in terms of this letter of arrangement and legal action can be taken to recover the loan dues. a. Any breach of the terms of this Letter of Arrangement; b. Any one or more instalment(s) are not paid on time; c. Interest has not been paid on due date; d. If any information furnished by you to the bank is found to be incorrect or incomplete in any material particulars. k. This letter of arrangement shall be read with the hypothecation agreement to be executed by you for availing the various loan/facility.

Received a copy of letter Yours faithfully

BRANCH MANAGER

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