Normally, a credit card is a piece of coded plastic which is issued by banks to withdraw money on credit or make purchase on credit provided by the bank. That’s something usual. However, the Reserve Bank of India provides two different kinds of credit cards, namely Kisan Credit Card and General Credit Card that are used by the rural and semi-urban people to buy essentials for their agricultural or enterprising needs.
The issuance of General Credit Cards (GCC) is in accordance with the RBI guidelines; however, RBI permits banks to float their own terms and conditions within the scheme. Therefore, if a reader has to find the accurate guideline of GCC, he or she has to check the same with the concerned bank that they would be dealing with to know the required details.
Some of the common form of GCC are Laghu Udyami Card, Artisan Credit Card, Weaver’s Card, Swarojgar Credit Card, etc, all of which cater to the non farming credit essentials of concerned citizens covered under the scheme. With these cards, they can make purchases on credit or withdraw cash for their petty needs and pay them in almost the same way a credit card payment works, barring that the rate of interest are quite subsidized in case of General Credit Cards.
The sole objective of General Credit Cards is to maximize the flow of credit to small entrepreneurs engaged in rural and semi-urban non agricultural self-employment. Anyone who is working under this domain can open an account for GCC and avail the facilities accordingly. The scheme is not restricted to any particular state and is applicable across the entire country.
The credit facility provided under the GCC scheme provides both term loan and working capital for all the requirements that can arise for the small entrepreneurs. The GCC is simply like a Debit Card or a Smart card provided by the banks and is a Biometric compatible card which could be used at ATM and swiping machines and it stores sufficient information including credit profile and assets of the card holder.
There are places where digitalized GCC could not be issued by the banks due to technical limitations and in those conditions banks issue a card or a passbook which the card holder can use to make transactions physically from the branch. The card or passbook includes necessary information such as address, photograph, validity period, etc of the card holder and works on the same credit parameters.
Generally there is no ceiling on the amount of loan under GCC Scheme since the loan and credit facility taken under the scheme is for non – farming entrepreneurial activity and comes under the priority sector. The limits of the card are however fixed based on the risk assessment depending upon case to case.
The GCC Scheme follows the security norms as set by the Reserve Bank of India’s guidelines and the lending is often a collateral free system. The rates charged on the General Credit Cards are not always fixed entirely for the RBI and bank’s board is the one which sets forth the interest of lending.
Overall, the GCC scheme is certainly a step ahead to help make India a place of self – employment and uplift the needy and poor section of population by encouraging them to take up entrepreneurial initiatives. What remains a concern is that the facility reaches the actual needy citizens and the repayment procedures are followed articulately by the banks so that the system gets running at the stipulated pace.