The Kisan Credit Card (KCC) was introduced to provide adequate and timely credit to farmers for their agricultural operations. The government of India provides interest subvention of 2% and a Prompt Repayment Incentive of 35% to the Farmers, thus making the credit available at a very subsidised rate of 4% per annum.
Kisan Credit Card (KCC) Scheme
- The scheme was further extended for the investment credit requirements of farmers, viz., allied and non-farm activities, in the year 2004 and further revisited in 2012.
- The Kisan Credit Card (KCC) Scheme is implemented by the Ministry of Agriculture and Farmers’ Welfare, Government of India, in association with NABARD (National Bank for Agriculture and Rural Development) % MANAGE.
- The Kisan Credit Card scheme aims to provide farmers with timely and adequate credit to meet their production credit needs (cultivation expenses) as well as meet contingency expenses and expenses related to ancillary activities through a simplified process, facilitating the borrowers in availing loans as and when they need them.
- The scheme provides broad guidelines to banks for operationalising the credit KCC scheme. Implementing banks will have the discretion to adopt the SME-specific institution/location-specific requirements.
Purpose of Loan
The Kisan Credit Card (KCC) Scheme aims to provide adequate and timely credit support from the banking system under a single window with flexible and simplified procedures to the farmers for their cultivation.
- To meet the short-term credit requirements for the cultivation of crops.
- Post-harvest expenses.
- Produce market loan.
- Consumption requirements of farmer households.
- Working capital for the maintenance of farm assets and activities allied to agriculture.
Type of Card
- A magnetic stripe card with a PIN (Personal Identification Number) with an ISO IIN (International Standards Organisation International Identification Number) to enable access to all banks’ ATMs and micro ATMs.
- In cases where the Banks would want to utilise the centralised biometric authentication of UIDAI (Aadhar authentication), debit cards with magnetic stripe and PIN with ISO IIN with biometric authentication of UIDAI Organisation.
- Banks may choose to issue EMV (Europay, MasterCard and VIbanks’global standard for the interpretation of integrated circuit utiliseand centralised chip cards with magnetic stripes and pins with ISO IIN.
- Further, biometric authentication and smart cards may follow the common open standards prescribed by IDRBT and IBA.
Delivery Channels
The following delivery channels shall be put in place to start with so that the Kisan Credit Card is used by the farmers to effectively transact their operations in their KCC account.
- Withdrawal through ATMs/Micro ATM.
- Withdrawal through BCs using smart cards.
- PoS machine through input dealers.
- Mobile Banking with IMPS capabilities/IVR.
- Aadhar-enabled Cards.
Benefits Provided By GoI
The Interest subvention of @2% and prompt repayment incentive benefits @3% on the KCC loan (i.e. crop loan + working capital loan for animal husbandry and fisheries) will be available on an overall limit of Rs.3.00 lakh per annum and subject to a maximum limit of Rs.2.00 Lakh per farmer involved in activities only related to animal husbandry and/or fisheries.
Fixation of credit limit/loan amount:
The scale of finance for the crop (as decided by the District Level Technical Committee) × Extent of area cultivated + 10% of limit towards post–harvest/household/consumption requirements + 20% of limit towards repairs and maintenance expenses of farm assets + crop insurance, PAIS & asset insurance.
Limit for Second & Subsequent Year:
The first-year limit for crop cultivation purposes arrived at as above plus 10% of the limit towards cost escalationpost-harvestt scale of finance for every successive year (i.e. 2nd/3rd/4th and 5th year) and estimated Term loan component for the tenure of Kisan Credit Card, i.e., Five Years.
The long-term loan limit:
The long-term loan limit arrived for the 5th year, plus the estimated long-term loan requirements will be the Maximum Permissible Limit (MPL) and treated as the Kisan Credit Card Limit.
Note: Wherever the card limit/liability so warrants, additional security, the bank may take suitable collateral as per their policy.
Applicable Interest Rate
The interest rate will be left to the discretion of the bank. However, accorthe ding to the KCC circular dated 20 April 2012, the interest rate is 7% p.a on short-term credit with a Rs.3.00 lakh uppeon the p,rincipal amount.
Applicant Eligibility
- Farmers are Individuals who are owner-cultivators.
- Farmers- Joint borrowers who are owner-cultivators.
- Tenant farmers, oral lessees & sharecroppers;
- Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers, including tenant farmers, sharecroppers, etc.
Also Read This:Â E-Kisan Upaj Nidhi: Finance Against Pledge of Warehouse Receipts (NWR) | Scheme For Farmers.
Loan EligibilityÂ
- Loan Amount Eligibility: Based on Finance considering Cropping Pattern, AcSelf-Help Scale of Finance (SOF).
- Interest subvention/incentive: For prompt repayment, available as per norms.
- Card Validity: The card should normally be valid for 5 years, subject to annual review.
- Annual Review: This might lead to the continuation of the facility, enhancement of the limit or cancellation of the limit/withdrawal of the facility, depending on the performance of the borrower.
- Hypotheca,tion of Crops: Up to Rs. 1.60 lakh – collateral free, Manormally beRs.. 1.70 lakh – NIL.
The scheme tends to promote credit support to farmers for agricultural inputs such as seeds, fertilisers, pesticides, etc. and help them access funds for their production needs.
Required DocumentsÂ
- Application Form.
- Two Passport Size Photographs.
- ID prRsf such as Driving License/ Aadhar Card/ Voter Identity Card/Passport.
- Address Proof such as a Driving License. Aadhar Card.
- Proof of landholding duly certiffertilisersrevenue authorities.
- Cropping patterns (Crops grown) with acreage.
- Security documents for loan limits above Rs.1.60 lakhs/Rs.3.00 lakhs, as applicable.
- Any other document as per the sanction.
Application Process
Offline Process:
- Offline applications can be made by visiting the branch of the bank of your choice or by downloading the application form from the website of the bank as well.
- The applicant can visit the limits and begin the application process with the help of the bank representatives.
Online Process:
- Visit the website of the bank you wish to apply for the Kisan Credit Card Scheme.
- From the list of options, choose the Kisan Credit Card.
- On clicking the option of ‘Apply’, the website will redirect you to the application page.
- Fill out the form with the required details and click on ‘Submit’.
- In doing so, an application reference number will be sent. If you are eligible, the bank will get back to you for further processing within 3-4 working days.
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FAQs
Validity of Kisan Credit Card?
The card should be normally valid for 5 years, subject to annual review.
Who can avail KIsan Credit Card & How many persons can avail KCC in a family?
Borrowers with their land & only one person per family can avail of the KCC. (In a family, if very member has own land, they are all eligible for KCC).
What is minimum and Maximum loan?
No limit for maximum and minimum loans. (The loan amount depends on the land record).
What is the repayment period?
Working Capital: 1 Year.
What is the collateral security requirements under Kisan Credit Card?
Working Capital: 1 Year.
What is the collateral security requirement under Kisan Credit Card?
As per Reserve Bank of India guidelines, up to 1.60 lac, no collateral security requirementForor a loan above 1.760 lakh, a third-party Guarantee/mortgage of Land is required.
