MUMBAI, Feb. 26 -- Banks plan to approach the Reserve Bank of India (RBI) to seek flexibility on how they account for soured loans given to farmers under the Kisan Credit Card (KCC) scheme amid rising delinquencies, three people aware of the matter said.
Banks want RBI to allow them to renew the scheme for small and marginal farmers for an amount up to '3 lakh, provided they pay only the interest amount, the people said on condition of anonymity. KCC loans come up for annual renewal in the June-July period.
"All KCCs are supposed to pay entire outstanding at the year-end, and fresh loans are given for the same limit. For MSMEs, cash credit limit is rolled over for the next year if they serve only the interest. There is no requirement for ...