Government modifies lending provisions for Kisan Credit Card
As part of the new initiative, the government is looking to improve the existing sources of formal credit to farmers. The Kisan credit card will be processed within a week of application. The loan amount for the card is determined based on the guidelines set by the Reserve Bank of India (RBI) in 2018. In case of credit limit of Rs.3 lakh, the card will receive a Goods and Services Tax (GST) waiver and other card-related charges. In 2017-18, an estimate of 45 million Kisan Credit Cards were in use.
Farmers can avail a credit of up to Rs.3 lakh for an interest rate of 7% p.a. in case of timely repayments, they will receive an interest rate which is lowered by 3%. The discount on the interest rate will be valid for 6 months post the harvest. This is applicable for farmers who have availed the credit against warehouse receipts.
The credit limit for the first year is calculated as the ‘scale of finance’ plus 10% of postharvest and household needs along with 20% maintenance-related assets and insurance of the crop. The credit limit for the second year is based on the limit set for the first year.
The Kisan Credit Cards were issued in 1998 to financially support the farmers for their agricultural needs. Most of the farmers in the rural areas are still dependent on informal sources of credit. However, the informal lenders tend to charge high interest rates.
25 February 2019
Kisan Credit Card (KCC) extended to Animal Husbandry Farmers and Fisheries: RBI
The Reserve Bank of India (RBI) announced that the Government of India has decided to extend the Kisan Credit Card (KCC) scheme to Fisheries and Animal Husbandry Farmers to help them meet their working capital requirements.
The announcement was made during the presentation of Union Budget 2018-19.
According to the RBI, which after examining and consulting the stakeholders decided to extend the KCC scheme, the facility would now help the farmers to meet their short term credit requirements for rearing birds, fish, animals, shrimp and other aquatic organisms.
The District Level Technical Committee (DLTC) will fix the scale of finance based on local cost calculated on the basic per acre or animal or bird or unit, etc., as per the RBI mandate.
For fisheries, the working capital under the scale of finance might cover recurring seed cost, cost to purchase feed, fertilisers, soil conditioners, charges related to harvesting and marketing, fuel/electricity charges, labour cost, lease rent, etc.
For Animal Husbandry the components may include recurring cost towards feeding, veterinary charges, labour cost, water and electricity supply, etc.
6 February 2019
Service Charge on Kisan Credit Cards likely to be Waived Off: IBA
The Indian Banks Association (IBA) has reportedly requested all the banks offering Kisan Credit Cards to waive off all the applicable service charges on the crop loans
The move is aimed at encouraging more number of farmers to opt for agriculture loans while easing the pressure on them, mentioned IBA.
Currently, some of the scheduled commercial banks collect service charge towards loan processing, documentation, inspection, ledger folio, etc., for agriculture loans up to Rs.3 lakh. Surprisingly, the charges are levied irrespective of the disbursal of the loan, preventing the farmers from approaching the banks for loans.
With the Indian agriculture sector largely dominated by small and marginal farmers (SMF), providing timely and affordable credit to the segment is critical to attaining inclusive growth.
The Kisan Credit Card Scheme was thus introduced to provide credit support to the farmers through the banks under a single window. The scheme enables farmers to meet short term credit requirements for cultivation of crops, purchase seeds and fertilisers and other allied activities.
5 February 2019
Union Budget 2019-20: Income Support for About 12 crore Farmers
The Union Budget 2019-20 presented this week has brought some cheer to farmers in the country.
The center has announced a new scheme called Pradhan Mantri Kisan Samman Nidhi under which Rs.6,000 per hectare will be provided for eligible farmers every year.
A separate Department of Fisheries, which was earlier under the Union Ministry of Agriculture and Farmer’s Welfare, has also been announced.
A budget of about Rs.75,000 crore has been allocated for the new PM Kisan Samman Nidhi scheme and an additional Rs.20,000 crore for the Revised Estimate for the current year.
The new scheme has been launched with an objective to provide a way for the farmers to earn and live a life of respect. BY 2020, it is expected to double the farmer’s income.
The amount for the scheme would be credited directly to the farmer’s bank accounts in 3 installments of Rs.2,000 each per hectare.
Some other benefits have also been announced all of which are aimed at bringing all the farmers under the Kisan Credit Card Scheme.
4 February 2019
Interest-free Loan up to Rs.1 lakh for Kisan Credit Cardholders
The current BJP government headed by Mr.Narendra Modi has announced another interesting scheme for farmers in the country.
Termed as the Interest Subvention Scheme (ISS), the package provides short-term crop loans for the farmers who are covered under the Kisan Credit Card Scheme.
The new scheme, which is scheduled for launch ahead of the interim budget presentation on 1st February, would provide interest-free loan up to Rs.1 lakh for small and marginal farmers who already have Kisan Credit Cards.
The ISS is anticipated to help the farmers augment their income by allowing flow of institutional credit which in turn supports higher production.
Under the revised ISS, small and marginal farmers having a land of less than 5 acres will receive interest-free loans ranging from Rs.50,000 to Rs.1 lakh.
Farmers with larger holding are, however, covered under the exiting ISS scheme. They are eligible for short-term crop loans up to Rs.3 lakh at a subsidised interest rate of 7% for up to one year.
In case of prompt repayment, they can avail an incentive of 3% rate cut, bringing down the rate of interest on the loans to 4%.
The existing scheme also provides post-harvest loans for up to 6 months at the same interest rate to small and marginal farmers holding Kisan Credit Card.
Reportedly, the new scheme would cost the exchequer about Rs.30,000 crore a year. The disbursals of the scheme would begin immediately from next month so as to enable the farmers plan ahead for coming Kharif season.
The new scheme is expected to increase institutional credit flow and bring more farmers within the institutional credit fold. Apparently, it is a better alternative to the loan waiver scheme which often hurts banks preventing them to lend loans to the farmers.
Of the total Rs.10 lakh crore agricultural loan disbursal target set for the year 2017-18, about 70 to 75% has been reserved for crop loans.
22 January 2019
Kissan Credit Cards Least Sought After In Telangana State
According to a recent report released by National Bank for Agriculture and Rural Development (NABARD), the household debt among the farmers in the state of Telangana is increasing and at the same time, 79% of them are struggling to repay them on time.
The report also revealed that the average outstanding debt per household in the state is Rs.91,407 and is mostly used for health expenses and domestic needs and not for agricultural needs.
Surprisingly, 40% of the loans are taken from the non-institutional sources such as money lenders, friends and family, despite the government’s efforts to provide the best credit lines for the farmers.
The survey also found that the use of Kissan Credit Cards (KCC), the line of credit specially introduced for farmers, was quite low at 10.5%. About the loans taken by the farmers, more than 80% of households have obtained only one loan, 13% have taken 2 loans and only 3% have availed up to 5 loans in the period 2016 – 2017.
28 September 2018
Karnataka Budget Meeting 2018: HD Kumaraswamy Vows to Waive Farmer Loans, Terms and conditions Apply
After much debate about farm-loan waiver, HD Kumaraswamy, the Chief Minister of Karnataka has announced that about Rs.53,000 crore farm-loans will be waived. He stated that he could manage to work out the waiver of up to Rs.2 lakh. This waiver given will be reimbursed to the bank by the government over 4 years in yearly and half-yearly instalments.
The Chief Minister of Karnataka stated that all farm-loans availed after 01 April 2018 will be waived up to Rs.2 lakh. This includes all farm-loans availed from nationalised banks, regional rural banks, private banks and primary cooperative credit societies, farmer service cooperative societies and Kisan credit card.
Apart from providing a waiver, the government is also providing incentives to those who has repaid their earlier seasons’ crop loans or Kisan Credit card loans. For the, the incentive amount is fixed at Rs.25,000 per family.
12 July 2018
Uttar Pradesh Government Announced Rupay Credit Cards For Farmers
In a move to improve the means to improve farmer’s income, the Uttar Pradesh government has announced that it will provide RuPay credit cards to about 90 lakh small and marginal farmers in the state. The farmers can use the credit cards to avail agricultural loans, added the source.
It was also reported that the state government will seek NABARDs help in providing RuPay credit cards to the farmers. The district magistrates were supposed to provide a list of eligible farmers by 30 June based on which the credit cards will be distributed in the first week of July.
7 June 2018
Features & Benefits of Kisan Credit Card
In India, one of the most popular reasons behind the grave issue of farmer suicides is the debt spiral that they often get trapped into. In the rural areas of the country, farmers depend on informal money lending institutions that charge a huge amount of interest on the sum that the farmers borrow. This leads them to a vicious circle of poverty leaving them with major debts. To tackle this menace, the government of India launched the Kisan credit card in the year 1998. With this card, the government intended to provide timely and short-term credit to the farmers of the country during the seasons of planting and harvest. This scheme was initially introduced in the budget session in the year 1998-99 by Yashwant Sinha, the then finance minister. Listed below are the features and benefits of a Kisan credit card:
• Additional credit provided for crop production.
• Credit offered to fulfil the monetary demands of agriculture and other agro-related activities.
• Cardholders receive an insurance coverage.
• The farmer receives monetary protection against loss of crops due to natural calamities, pest attacks, etc.
• In certain situations, collateral security is also offered.
• The rate of interest, the margin, and the security rates are set by the RBI.
• Rescheduling and conversion of loans are permitted in a situation of damaged crops due to natural calamities.
• Repayment options are flexible.
• The disbursement process is simple and convenient.
• Term loan or single-credit facility for all agricultural requirements.
• Assistance provided in purchasing seeds, fertilizers, etc.
• Funds can be withdrawn from any bank.
• Minimum documentation is required in order to procure a Kisan credit card.
• Cardholders can utilise the facility of revolving credit for any amount of withdrawal and repayment made within the allotted credit limit.
• The maximum credit limit is decided on the basis of agricultural produce.
26 March 2018
SBI Will Offer Credit Cards to Farmers Soon
SBI Cards and Payments, the credit card arm of the State Bank of India, announced that it will provide credit card for farmers across India. The credit cards are already launched in three states including Rajasthan, Gujarat and Madhya Pradesh on a pilot basis. So far, the bank received more than 100 applications in the three states. Depending on the success rate of the pilot project, the bank mentioned, it will launch the credit cards in rest of the Indian states.
The new credit cards for farmers will have a fixed credit limit and a credit period of 45 days. Farmers who fail to repay the credit within the specified time will be levied interest penalty, which compared to the regular credit cards is pretty less, added the bank.
Of the total credit limit available on the card, farmers can use 20-25% to buy non-agricultural products, while the core limit should be used only to make purchases related to agriculture.
9 February 2018