Mumbai, Dec. 27: The Reserve Bank of India (RBI) today asked banks to introduce a general credit card for people living in semi-urban and rural areas without insisting on security or questioning the purpose for the loan amount.

Earlier, kisan credit cards were given to farmers, which allowed them to avail of loans based on their sanctioned limits. However, there was also a demand for a card that could cover general credit needs.

As a result, the central bank has asked banks to issue general credit cards in rural and semi-urban areas based on the assessment of income and cash flow of the household.

To help banks implement the scheme successfully, the RBI said a general credit card can be issued in the form of a pass book if the cardholder wants to operate cash withdrawals from the bank branch.

The RBI said the scheme will not insist on security and the purpose or end-use of the credit. Banks have also been told to charge interest on the facility in an appropriate and reasonable manner. The limit, the central bank added, may be periodically reviewed and revised/cancelled depending on the track record of the cardholder.

The RBI has fixed an upper credit limit of Rs 25,000 for an individual under the new scheme.

According to the RBI, women may be given a preferential treatment under the scheme. Banks have been asked to use the services of local post offices, schools, primary health centres, local government functionaries, farmers’ associations, well-established community-based agencies and civil society organisations to tap borrowers.

“The scheme may be implemented by all scheduled commercial banks and RRBs at any of their branches,” the RBI said.

Under the scheme, banks will provide revolving credit facilities. The cardholder will be entitled to draw cash up to the sanctioned limit from the specified bank branch.

To encourage banks to take up the scheme, the RBI said 50 per cent of credit outstanding under the card up to Rs 25,000 can be treated as indirect agricultural financing. The eligibility criteria will, however, be subject to review.