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Objectives-

SCC Scheme aims at providing adequate and timely credit ie. working capital/ or block capital or both to small artisans, handloom weavers, service sector, fishermen, self employed persons, rickshaw owners, other micro-entrepreneurs, etc. from the banking system in a flexible, hassle free and cost effective manner. The facility may also include a reasonable component for consumption needs.

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Participating Banks-

The Scheme is to be implemented by all Commercial Banks, RRBs, State Cooperative Banks/ DCCBs/PACS, SCARDBs/PCARDBs and Scheduled Primary Cooperative Banks. The banks will have to actively market the scheme to the eligible clientele.

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Sanction of term loan/ Fixation of working capital limit

• The term loan will be provided for meeting the investment requirements and it will be repaid within five years in suitable instalments.
• The Revolving cash credit will be fixed taking into account the operating cycle/nature of the investment and shall be fixed based on available balance after sanction of term loan.

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Quantum of limit

Rs. 25,000/ per borrower as composite loan. The initial investment in fixed assets and/ or working capital requirement / recurring expenditure of the borrower are to be taken as the base for fixing the limit. The working capital/ recurring expenditure limit may be in the form of a revolving cash credit and fixed as a percentage of the turnover divided by the number of operating cycles per annum. A component for consumption credit could be built in keeping in view the value of the family labour in the productive activity. The total limit would have a relationship with the projected net earning and the repayment capacity of the borrower.

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Validity

SCC is normally valid for 5 years subject to satisfactory operation of the account and renewed on a yearly basis through simple review process. The operations in the account should be regular

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Operation of the scheme

• The banks will have absolute freedom to select the clients for the card. There will be no subsidy from the Government under this Scheme.
• The borrower can avail the credit facility as per his/her requirements ie either term loan or working capital loan or a combination of both.
• The beneficiaries under the Scheme are to be issued with a laminated credit card and a passbook incorporating the name, address, borrowing limit, validity etc. which will serve both as an identity card as well as facilitate recording of the transactions on an ongoing basis.
• The issuing branch would maintain the ledger account in respect of each SCC account holder. The term loan component and working capital component will be accounted for separately. The operations in the account will be generally through the card-issuing branch. However, the banks may at their discretion permit operations through the designated branches, taking into account the convenience of the clientele.
• Withdrawal from the account will be through withdrawal slips/cheques. The SCC and Pass Book should be produced each time cash withdrawal is made.
• Opening of SB A/c should not be a precondition for issue of SCC. However, in case SCC holder desires on his/her own to open SB A/c, he/she may be allowed to do so.
  

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