What changed
The GCC scheme was revised to explicitly cover all non-farm entrepreneurial credit extended to individuals, ensuring such lending is captured under Financial Inclusion Plans. Banks must now report existing credit cards like Artisan or Weaver's Card under GCC, while consumption credit must be reported separately as overdraft/consumption credit. The earlier 2005 and 2008 guidelines are superseded.
What it means for you
Banks need to align their reporting systems to classify all individual non-farm entrepreneurial loans under GCC, which removes any loan ceiling for such priority sector advances. This increases the flow of credit to small borrowers but requires careful segregation from consumption credit to avoid misreporting. Lenders must also ensure compliance with collateral-free lending norms for micro and small units.
What you must do
- Update internal systems to report all non-farm entrepreneurial credit to individuals under GCC in FIP reporting.
- Include existing credit cards (e.g., Artisan, Laghu Udyami, Weaver's Card) under GCC reporting.
- Separately report consumption credit as overdraft/consumption credit in FIP format.
- Ensure no loan ceiling is applied for GCC advances that meet priority sector criteria.
- Adopt smart card or passbook formats for GCC as per RBI guidelines.
Who it affects
All scheduled commercial banks including RRBs, Priority sector lending teams, Financial Inclusion Plan reporting units, Small entrepreneurs and individual borrowers
What types of credit are covered under the revised GCC scheme?
All non-farm entrepreneurial credit extended to individuals that qualifies as priority sector, including working capital and term loans. Consumption credit is excluded.
Is there a maximum loan limit under the GCC?
No, there is no ceiling on the loan amount as long as it is for non-farm entrepreneurial activity and eligible for priority sector classification. Limits are set case-by-case based on risk assessment.
How should banks report existing credit cards like Artisan Card under GCC?
Banks must include all such cards catering to non-farm entrepreneurial credit needs under GCC reporting in FIPs, while consumption credit cards are reported separately.