RBI today announced through a circular that the GCC Scheme shall henceforth be called “General Credit Card (GCC) Facility. The General Credit Cards (GCC cards) can be issued by banks to Individuals who have been sanctioned working capital facilities for non-farm entrepreneurial activities that are eligible for classification under the priority sector guidelines.
The GCC shall be issued in the form of a credit card conforming to the stipulations in the RBI Master Direction as updated from time to time. The terms and conditions of the credit facilities extended in the form of GCC shall be as per the Board approved policies of the banks, within the overall framework laid down by Reserve Bank. Guidelines of RBI on collateral-free lending for micro and small units issued from time to time shall apply. The cards can be used by individuals for the purpose of entrepreneurial expenses with specified terms and conditions and not for personal use.
The credit facility extended under GCC would include both the working capital and term loan requirements of entrepreneurs. The GCC may be issued in the form of a Smart card / Debit card (Biometric smart card compatible for use in the ATMs / Handheld Swipe Machines and capable of storing adequate information on the entrepreneur’s identity, assets, credit profile, etc.). Wherever the accounts are not digitized, the GCC may be issued as a card/passbook or a credit card cum passbook incorporating the name, address, photograph of the holder, particulars of borrowing limit, validity period, etc.
RBI advised banks that any other Credit Card (e.g. Artisan Credit Card, Laghu Udyami Card, Swarojgar Credit Card, and Weaver’s Card, etc.) in existence and catering to the non-farm entrepreneurial credit needs of individuals should be included for reporting of credit extended through the General Credit Cards under the Financial Inclusion Plans (FIPs). As the GCC is intended to cover all entrepreneurial credit, consumption credit extended to individuals should not be reported under GCC it said.
“These instructions supersede the GCC guidelines issued in December 2013 and come into effect as of the date of this circular. Debit cards, if any, already issued under the circular of 2013 shall remain valid till their expiry/repayment of the existing credit facilities, whichever is earlier”, the circular added.