Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
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    Kisan Credit Card

    kisan credit card

    What is a Kisan credit card? 

    The Kisan Credit Card (KCC) programme was launched by the NDA government in 1998. With this scheme, the government aimed to fulfil timely and short-term credit needs of the farmers of India during the planting and harvesting season. It was also introduced to reduce the dependence of Indian farmers on the informal banking sector like moneylenders.  It was initially proposed in the budget session in the year 1998-99 by the then Finance Minister, Yashwant Sinha. As a result, NABARD (National Bank for Agriculture & Rural Development) had come up with a Model Kisan Credit Card Scheme after a long discussion with some major banks in the country.

    This card is offered by cooperative banks, public sector banks, and regional rural banks. Kisan Credit Cards can be availed by any farmer in India. Tenants and sharecroppers can also use this card. This scheme not only simplifies the credit delivery and screening process for farmers who may not know about banking practices and procedures. KCC also provides flexible payment schedule after the harvest season using which the borrower can push his payments in case they suffer a bad crop season. KCC also works as a single credit facility that the farmer can use to fulfil all their agricultural needs. 

    Brief History of Kisan Credit Cards in India: 

    Kisan Credit Card facility was initially proposed by the Finance Minister Yashwant Sinha in the financial year 1998-1999 Budget, with the objective of providing easily accessible short-term credit to farmers to meet their immediate credit needs during the crop season. Reserve Bank of India (RBI), along with National Bank for Agriculture and Rural Development (NABARD) took up the cause and initiated the introduction of Kisan Credit Cards in India.

    Rationale behind the Kisan Credit Card Scheme: 

    There are several hurdles faced by farmers in the process of acquiring adequate finance from banks, such as: long drawn-out documentation and processing, complicated practices followed by banks and other financial institutions, delay in processing and also lack of awareness among farmers regarding banking practices and benefits. Most farmers depend on non-institutional means of credit for their immediate needs such as: purchase of seeds, fertilizers, pesticides etc. and this in turn affects them negatively since non-institutional credit is costly and counter-productive. The Kisan Credit Card scheme intends to remove such complications by offering cost effective credit to farmers for agricultural and allied purposes in a timely manner, from reliable banking systems. Agriculturists can purchase items related to their farming needs using their Kisan Credit Cards and also withdraw the required amount for related expenses.

    How do Kisan Credit Cards work? 

    The operation of this facility is simple and straight-forward. Based on the land holdings and the income earned from it, banks issue farmers Kisan Credit Cards. The farmers should have a good credit history in order to be eligible for the same. Those who receive the Kisan Credit Card, get facilities like: passbook with the name, particulars of land holding, address, validity period, credit limit, etc., which serves as the customer’s unique identification as well as a system for tracking their transactions. This credit cards can be used at outlets, as well as to withdraw cash to make the necessary purchases.

    How can farmers use the Kisan Credit Cards? 

    Under this scheme, farmers can withdraw the loan amount in form of cash withdrawals using withdrawal slips and the Kisan credit card-cum-passbook. Kisan Credit Card holders who have a credit limit of Rs. 25,000 can also avail cheque books.


    Regional Rural Banks, Cooperative Banks and Public Sector Commercial Banks have implemented the Kisan Credit Card scheme. Its primary objective is to provide easily attainable short term loans to farmers. The scope of this unique facility also includes term loans for agriculture and other allied activities and is a determining factor for consumption loan. The scheme currently offers:

    • Credit to meet the financial requirements of agricultural and other allied activities.
    • Ancillary credit for crop production and other contingencies.
    • Insurance coverage for Kisan Credit Card holders.
    • National Crop Insurance scheme is offered to the Kisan credit cardholders, which provides coverage for crop loans given under the KCC scheme for certain crops.
    • Protection is provided against loss of crops due to pest attacks, natural calamities, etc.
    • In some cases collateral security is to be provided. If the loan amount is above Rs. 100000/-, then the cardholder has to pledge his land as mortgage and hypothecate the crops raised on it.

    Other features include: 

    • Farmers who are eligible for the Kisan Credit Card, is offered a passbook or a card-cum-pass book.
    • If a farmer is eligible for a production credit of Rs. 5000 or more, then he/she is eligible for a Kisan Credit Card.
    • As per the concerned bank’s discretion, sub-limits may be fixed.
    • The facility of revolving credit is available for any amount of withdrawals and repayment made within the credit limit. The credit limit is fixed based on the individual’s land holdings, scale of finance, annual production credit needs, etc.
    • Based on the annual review, the credit card can be valid up to 3 years.
    • Repayment for the amount borrowed can be made within a period of up to 12 months.
    • Credit limits will be increased to take care of change in cropping pattern, increase in costs, etc. as an incentive for good record on credit card usage.
    • Operations will be either though may be through PACS in the case of Cooperative Banks or issuing branch in case of other banks, at the sole discretion of the bank.
    • Conversion/rescheduling of loans also permissible in case of damage to crops due to natural calamities.
    • Security, margin, rate of interest, etc. are set as per RBI norms.

    Benefits of Kisan Credit Card: 

    • Flexible repayment options
    • Hassle-free disbursement procedure
    • Single credit facility/ term loan for all agricultural requirements
    • Dependable and easily available credit which enables a decrease in the farmer’s interest burden.
    • Assists in the purchase of fertilizers, seeds, etc.
    • Assists in availing cash discounts from merchants/ dealers
    • Credit is available for a period of up to 3 years, without any seasonal appraisals.
    • Income from agricultural sources determines the maximum credit limit.
    • There is no restriction on the cash withdrawals that can be made by the Kisan Credit Card holder, as long as it is within the credit limit set by the bank.
    • Repayment can be made once the harvest season in over.
    • Lower interest rates.
    • Margin, security and documentation terms and conditions are similar to that applicable to agricultural advance.
    • Credit is made available for annual agricultural requirements and expenses.
    • Minimal documentation and maximum flexibility offered for withdrawal of the required funds from the Bank.
    • Funds can be withdrawn from any of the Bank’s branches, as per the sole discretion of the bank.

    Interest and other charges on Kisan Credit Cards:

    Kisan Credit Card interest rates as well as credit limits varies from bank to bank. Generally, the applicable interest rate per annum for Kisan Credit Cards is 9%, for a credit limit of maximum Rs. 3 Lakh. Central government allows certain subsidies on interest rate applicable by the financing institutions, provided that the cardholder’s credit history is good. The additional interest subsidy provided is 2% and if the customer has a sound track record for three years, he/she is eligible for an increase in the credit limit. Other charges and fees involved in taking credit under this scheme are: insurance premium, processing fees, passport photo charges, charges on land mortgage deed, etc.

    Benefits to Banks: 

    This scheme is beneficial to banks since it is time and cost-efficient. There is no need for an elaborate documentation process or continuous appraisals under the Kisan Credit Card Scheme. Withdrawal of cash using the credit card requires very little paperwork and is simple and hassle-free for not just the card holder but for the Bank as well. Some other highlights include: no transaction costs, lesser risks in loan recovery, etc.

    Top Banks Providing Kisan Credit Card in India: 

    • NABARD - NABARD offers term loans and easily accessible credit to farmers to meet their basic agricultural expenses.
    • SBI - Short term credit is offered by SBI to farmers, for the purpose of meeting the production credit requirements, expenses related to allied activities, as well as contingency expenses.
    • Bank of India - provides flexible financial support to farmers in order to help meet the expenses involved in cultivation and other non-farm activities, at a lower cost.
    • IDBI - IDBI offers Kisan Credit Cards to farmers along with additional features like crop loans, investment credit and working capital for meeting agricultural expenses. Farmers, tenant cultivators, owner cultivators, individual farmers and sharecroppers are considered eligible for the Kisan credit card.
    • NPCI - RuPay Kisan credit cards are to be offered in the near future by National Payments Corporation of India (NPCI), as a part of its domestic card scheme for multilateral payments - RuPay.

    Insurance under Kisan Credit Card Scheme: 

    There is a personal accident insurance cover for farmers who have a Kisan Credit Card, as soon as the customer avails the scheme. The individual gets a personal accident cover of Rs. 50,000 in the event of death and Rs. 25,000 in case of disability. In order to be eligible to avail this insurance cover, the customer should not be above 70 years of age at the time of obtaining the Kisan Credit Card.

    Kisan Credit Cards offered by Different banks: A Brief Comparison 


    Credit Limit

    Maximum Tenure

    Insurance Coverage

    Axis Bank

    Credit limit up to Rs. 250 lakhs

    5 years

    up to Rs. 50,000/-

    Bank of India

    25% of the farmer’s gross estimated income, or a maximum of Rs.50,000/

    Credit upto Rs.10 lakhs can be offered to a farmer for extended period of 12 months


    State Bank of India

    Short term credit limit is fixed for the first year depending upon the crops cultivated as per proposed cropping pattern & scale of finance

    12 months for long term crops

    Personal Accident Insurance Scheme (PAIS), Asset insurance and Crop insurance is covered by the scheme.

    Indian Overseas Bank (IOB)

    Credit Limit is based on the scale of finance, cropping pattern and the extent of cultivation.

    5 years


    Kisan Credit Card FAQs: 

    1. How does a bank determine the credit limit on a Kisan Credit Card?

      The credit limit offered on a Kisan Credit Card for the initial year is based on:

      • The cultivation of crops according to the scale of finance and cropping pattern that was proposed.
      • household / post-harvest consumption requirements
      • Expenses related to the maintenance of crop insurance, farm assets, Asset insurance and Personal Accident Insurance Scheme (PAIS).
    2. What are some of the waivers offered on Kisan Credit Cards?
      • Waiver on Processing fees on a Kisan credit card limit of maximum Rs.3 lacs.
      • Waiver of Collateral security for
      • a limit of maximum Rs.1 lac
      • Maximum Rs.3 lacs for loans which have a tie-up arrangement for recovery.
    3. Is revolving credit facility available?

      Yes, revolving cash credit facility is available on a Kisan Credit Card, with any number of withdrawals, repayments, etc. made within the limit.

    4. What is the premium payable on the personal accident insurance scheme offered by KCC?

      Generally, the premium payable on personal accident insurance scheme for a year is Rs.15/-, and for 3 years the premium to be paid is Rs.45/-.

    Kisan Credit Cards From Other Banks:

    News About Kisan Credit Card

    • West Bengal Finance Minister requests SBI to increase credit limit in social schemes focus on the Kisan Credit Card

      Amit Mitra, the state finance minister in West Bengal urged the chairperson of SBI to raise the credit limit of various social schemes. Mitra mentioned that the national credit ratio is close to 73.73%, while the figures in Bengal stood at 64%. The current credit limit imposed by SBI is 50.58%.

      At the 14th Banking Conclave, Mitra stated that the state has attributed great focus on the Kisan Credit Card for the development of the farmer community. But SBI has only disbursed few Kisan Credit Cards till date.

      Mitra thereby requested the SBI chairperson to improve the disbursal of Kisan Credit Cards, so that maximum number of beneficiaries can be brought under it.

      14th July 2017

    • Smart Card IT Looking To Generate Revenue Worth Rs.4,000 Cr by 2020

      Smart Card IT Solutions a Mumbai based form, is targeting to 4x growth in their business by the year 2020. The smart card manufacturing company is aiming to generate business revenue worth Rs.4,000 crore in the coming 3 years, thanks to the digitisation drive going on in the country.

      Mr. Deven Mehta, Chairman and MD of Smart Card IT Solutions (SCIT) told reporters that the company is looking to increase their revenue by 4 times by 2020. SCIT is engaged in the manufacture of smart cards for various sectors like telecom, banking as well as for the government (kisan credit card, driving licence etc.). At present, the company produces about 1.2 million cards per day. For the banking sector, the demand is increasing, due to which SCIT is now doubling its capacity. The company is investing about Rs.200 crore to expand their smart card business for the banking vertical. He also said that the government is planning to issue smart chip embedded passports and Aadhaar enabled smart cards to senior citizens, both of which will be a major boost for the smart card business.

      26th May 2017

    • More than 5 Lakh Kisan Credit Cards Inactive

      On Friday, a state-level bankers committee found that more than 5 lakh Kisan Credit Cards in Himachal Pradesh are inactive. Out of 8 lakh such cards, only 2.4 lakh were active. Shrikant Baldi, Additional Chief Finance Secretary, asked the banks to hold camps in the rural areas to motivate farmers to use these cards to avail the benefits available under this scheme. These cards provide credit support to the farmers, which they can use for their farming and non-farming needs. Baldi also requested banks to install POS terminals at different places such as hospitals, government offices, etc., to promote cashless transactions. The Additional Chief Agricultural Secretary asked the banks to give a boost to economic activities in the villages by funding micro-irrigation schemes.

      31st March 2017

    • Kisan Credit Cards to be Converted into RuPay Cards on Mission Mode

      Narendra Modi, the Prime Minister of India, made a promise following demonetisation, and the Government has made its decision to allow NABARD’s coordination with the conversion of the Kisan Credit Cards into RuPay ATM cum Debit Kisan Credit Cards by Regional Rural Banks and Cooperative Banks. Once the conversion is complete, it is expected to help farmers in conducting financial transactions digitally. The Government is keeping a keen eye on the progress of the conversion as the initiative is also forecast to help in increasing the frequency of funds that farmers can access, along with the ease in withdrawing money whenever required.

      16th February 2017

    • KSS requests for increase in credit limit

      The Kisan Sangharsh Samiti (KSS) of Gautam Budh Nagar has sent a request letter to the Union Finance Minister, Arun Jaitley. The letter requests the government to increase the monthly limit of the Kisan Credit Card from Rs.20,000 a month to Rs.2,00,000 a month. The letter also requests the government to boost agro-based jobs in villages to increase employment within the rural community and reduce the number of villagers moving to cities in search of jobs. Farmers have also requested the government to make agriculture technology more accessible to aid sustainable grown in the future.

      9th February 2017

    • Switch To Rupay Debit Cards Affecting Bengal Farmers

      The decision by the Indian government to switch from Kisan credit cards to Rupay debit cards has affected farming communities in Bengal. Farmers contend that debit cards make it difficult for them to avail loans and buy necessities, which might force some of them to cease operations. The Kisan credit cards also offered farmers insurance services and disaster relied cheques, which have been stopped under the Rupay debit card. With the note ban making it difficult for farmers to access cash, the replacement of credit cards with debit cards has hit them harder. Statistics from the Bengal state government reveal that close to 1 lakh farmers have been inconvenienced due to the switch to debit cards. The farmers have requested the Chief Minister to provide them with an option to choose either the credit or debit facility so that their livelihood is not affected.

      23rd January 2017

    • More Than Three Crore Kisan Credit Cards Expected to be converted to RuPay Cards

      Narendra Modi, the Prime Minister of India, announced recently that more than three crore Kisan credit cards are in line to be converted to RuPay cards. The exercise is expected to take more than three months to be complete, and these cards will be offered to farmers in an effort to aid them access affordable credit for short durations. Although RuPay currently does not have any credit card products at the moment, this exercise could mark the company’s entry into the credit card market which is presently dominated by MasterCard and Visa. The card was expected to be launched in June, but was delayed to December and is now forecast for success.

      16th January 2017

    • Jamshedpur to Set Up Stalls on State and Central Schemes during PM Visit

      When the Prime Minister visits Jamshedpur’s East Singhbhum district, the administration of this rural sector has planned on setting up, up to 40 stalls. The purpose of these stalls will be to provide the populous with information on various state and centre run schemes for the farming community. Among this information will be that about credit cards for farmers like the Kisan Credit Card and the Soil Health Card. Also on the agenda for the PMs Visit is a talk with the panchayat where he will address them about the Gram Uday Se Bharat Uday scheme. The administration is also looking to inform the PM about various schemes that can be implemented to generate income.

      10th May 2016

    • Indian banks expected to play a major role in implementing the Pradhan Mantri Fasal Bima Yojana.

      The Reserve Bank of India has said that banks in India have a key role to play in the promoting the Pradhan Mantri Fasal Bima Yojana (PMFBY), which is a crop loan scheme. Loanee farmers having a Kisan Credit Card (KCC) or Seasonal Agricultural Operational (SAO) Loans have to compulsorily avail this scheme. Non-loanee farmers who hold a Jan Dhan account have to be supported by banks to avail this new scheme. The Pradhan Mantri Fasal Bima Yojana (PMFBY) would be replacing the Modified National Agricultural Insurance Scheme (MNAIS) and the National Agricultural Insurance Scheme (NAIS) for the 2016 Kharif crop season.

      6th April 2016

    • Samunnathi to Offer Loan Products to Forward Communities

      The Kerala State Welfare Corporation for Forward Communities (Samunnathi), in an attempt to broaden the reach of its entrepreneurial assistance plan, has partnered with the Industrial Development Bank of India (IDBI) to introduce a Small and Medium Enterprises Loan (SMEs) specially for the economically backward people among forward communities. Samunnathi will provide a onetime loan subsidy of 5% for loan quantum up to Rs. 6 lakhs and subsidy not exceeding Rs. 30,000. However, the loan quantum will be the responsibility of the bank.

      The loan will be offered for the purpose of starting SMEs, agriculture initiatives and for the purchase of autorickshaws and cabs. Loans offered under the Kisan Credit Card scheme, dairy and poultry industries are also covered. Loans up to Rs. 10 lakhs that are offered under Saral Vyapar scheme and loans not exceeding Rs. 1 lakh for microenterprises offered under Kisan Credit Card scheme are exempted from surety.

      Samunnathi aims at offering the subsidy scheme to over 200 beneficiaries who pay 12 loan instalments without any defaults. The Corporation has also come up with virtual banking system to enable repayments for beneficiaries directly from banks where they hold accounts.

      01st February 2016

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