Mod 4: April–May 2025: Recapitalization of DCCBs & Kisan Credit Card (KCC) Saturation Drive

📖 Chapter 5 of 8 🧩 Module 4 of 14 ⏱️ ~2 min read 💡 10 MCQs

Topic Part 1 of 2

Strengthening Rural Cooperative Liquidity (Apr–May 2025):

To ensure short-term crop loans reach marginal farmers at subsidized rates, the State Government and NABARD rolled out financial restructuring packages for weak District Central Co-operative Banks (DCCBs) in April–May 2025.

Regulatory Actions & Credit Targets:

Capital to Risk-Weighted Assets Ratio (CRAR): Capital infusion of over ₹350 crore was directed toward licensed cooperative banks in Magadh, Purnia, and Siwan to maintain their statutory CRAR above the RBI-mandated 9%.
KCC Saturation Campaign: A special drive saturated Kisan Credit Cards (KCC) for allied agricultural sectors—specifically dairy cooperative members affiliated with COMFED (Sudha) and traditional fish farmers.
Subsidized Interest Subvention: Crop loans up to ₹3,00,000 (₹3 lakh) were delivered at an effective interest rate of 4% per annum (accounting for 3% prompt repayment incentive on the base 7% interest rate).

Exam View: Key Takeaways:

Statutory CRAR Norm for Cooperative Banks: Minimum 9%.
Effective KCC Interest with Prompt Repayment: 4% per annum (Up to ₹3 lakh).
Allied KCC Coverage: Dairy farmers (COMFED) and inland fish farmers.

⭐ Key Points

Statutory CRAR Norm for Cooperative Banks: Minimum 9%.
Effective KCC Interest with Prompt Repayment: 4% per annum (Up to ₹3 lakh).
Allied KCC Coverage: Dairy farmers (COMFED) and inland fish farmers.

📌 One-line Q&A

Statutory CRAR Norm for Cooperative Banks: Minimum 9%.
Effective KCC Interest with Prompt Repayment: 4% per annum (Up to ₹3 lakh).
Allied KCC Coverage: Dairy farmers (COMFED) and inland fish farmers.

Questions 10 MCQs

Answer this question, then use Next.

What is the minimum Capital to Risk-Weighted Assets Ratio (CRAR) mandated by RBI for District Central Co-operative Banks?

Cooperative banks must maintain a minimum CRAR of 9% to retain operational banking licenses.

What is the effective net annual interest rate on crop loans up to ₹3 lakh for farmers who repay on time under the KCC scheme?

Base interest is 7%; with a 3% prompt repayment subvention from the government, the net rate drops to 4%.

Besides crop farming, which allied agrarian segments were actively covered in the 2025 KCC saturation drive?

KCC benefits were extended to dairy cattle owners and fish farmers for working capital expenses.

How many licensed District Central Co-operative Banks (DCCBs) operate across Bihar?

Bihar operates around 14 to 22 licensed DCCBs, with some banks spanning jurisdiction over multiple adjacent revenue districts.

What is the statutory credit limit up to which KCC loans enjoy central interest subvention benefits?

The subsidized short-term crop credit subvention scheme is applicable up to ₹3 lakh.

Which institution provides concessional refinance support to Bihar State Co-operative Bank for seasonal agricultural operations?

NABARD provides concessional Short-Term (Seasonal Agricultural Operations - ST-SAO) refinance to state cooperative banks.

What is the validity period of a Kisan Credit Card account before formal five-year renewal in cooperative banks?

A KCC facility is approved with an operational validity of 5 years, subject to annual credit reviews.

What financial term describes the ratio of a cooperative bank's capital reserves to its credit risks?

CRAR measures a bank's capital against its risk-weighted credit assets.

Which district in South Bihar witnessed significant cooperative restructuring under the Magadh Central Co-operative Bank?

Magadh DCCB services the agrarian credit network across Gaya and adjoining districts.

What prompt repayment incentive percentage is credited by the Central Government on KCC crop loans?

Farmers receive a 3% Prompt Repayment Incentive (PRI), effectively reducing interest to 4%.

Question 1 of 10

One-liners

Write your answer, then submit to see the correct answer.

Statutory CRAR Norm for Cooperative Banks: ______

Minimum 9%.

Effective KCC Interest with Prompt Repayment: ______

4% per annum (Up to ₹3 lakh).

Allied KCC Coverage: ______

Dairy farmers (COMFED) and inland fish farmers.