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  • Kisan Credit Card (KCC) Loan Scheme in India

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  • It wouldn’t be too much of a stretch to say that most farmers would not benefit from credit cards provided by most banks. In order to deal with this issue, the Government launched Kisan Credit Cards or KCCs.

    The Kisan Credit Card (KCC) scheme was launched in 1998 with the aim of providing short-term formal credit to farmers. Owner cultivators as well as tenant farmers can avail loans to meet their agricultural needs under this scheme at attractive rates of interest. The government has also simplified the application process to increase interest among farmers. Repayment is also simplified and dependent on the harvesting season, reducing the farmers’ debt burden.


    Know All About Kisan Credit Card

    Longer Repayment Period for Kisan Credit Card (KCC) Loans

    Most of the banks in India which offer the Kisan Credit Card (KCC) loans are looking for a longer loan repayment tenure for the loans. This has been suggested as the agriculture sector is under significant pressure. The cycle of the loans provided under the Kisan Credit Card scheme has been proposed to be increased to 36 or 48 months from the 12 months. This was proposed at the state level bankers’ consultancy meet in West Bengal.

    In addition to the enhancement of the loan repayment tenure, the banks have also proposed that the farmers should be allowed to avail extra loans even after failing to repay the previous loan. However, in order to do that, they should service the interest. Public sector banks have started a 3-stage consultation process recently on the basis of the directions passed by the Department of Finacial Services.

    The main focus of the consultation process would be to discuss 9 important issues. These include credit offered to MSMEs and agriculture sectors, digital banking, direct transfer of benefits, and education loans. The previous meeting was an intra-bank meet. However, this time the meeting will be an inter-bank meet at a state level.

    Key Features of Kisan Credit Cards

    Regional Rural Banks, Cooperative Banks and Public Sector Commercial Banks have implemented the Kisan Credit Card scheme in India. 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 basic features associated with the card are mentioned below:
    • Credit to meet the financial requirements of agricultural and other allied activities.
    • Ancillary credit for crop production and other contingencies.
    • Investment credit for agricultural requirements such as dairy animals, pump sets etc.
    • Produce marketing loans.
    • Post-harvest expenses.
    • Insurance coverage for Kisan Credit Card holders, including asset insurance and personal accident insurance scheme (PAIS).

    Salient Features of Kisan Credit Card Loan Scheme:

    Given below are some of the ancillary features available under the Kisan Credit Card Scheme as mandated by the RBI:

    • All farmers who are eligible for the Kisan Credit Card will be issued a smart card cum debit card in addition to the Kisan Credit Card.
    • The facility of revolving credit is available for any amount of withdrawals and repayments made within the credit limit. However, instalments of the amount withdrawn have to be repaid within 12 months.
    • Based on the annual review, banks will determine the validity of the existing credit card.
    • Credit limits can be increased at the issuing bank’s discretion to accommodate for changes in cropping pattern, increase in operating costs, etc. as an incentive for good record on credit card usage.
    • Conversion/rescheduling of loans also permissible in case of damage to crops due to natural calamities.

    Benefits of Kisan Credit Cards

    • Flexible repayment options and hassle-free disbursement procedure.
    • Single credit facility/ term loan for all agricultural and ancillary requirements.
    • Assistance in the purchase of fertilizers, seeds, etc. as well as in availing cash discounts from merchants/ dealers.
    • Credit is available for a period of up to 3 years and repayment can be made once the harvest season in over.
    • Minimal documentation and maximum flexibility offered for withdrawal of the required funds from the issuing bank.
    • Funds can be withdrawn from any of the bank’s branches across the country.

    Interest and Other Charges on Kisan Credit Cards

    According to the RBI, the fixing of Kisan Credit Card interest rates as well as credit limits can be set by the respective issuing bank. The average interest rate applicable ranges from 9-14% p.a.

    In addition, there are certain subsidies and schemes that the government offers farmers with regard to the interest rate. These would depend on the repayment history and general credit history of the cardholder.

    Other fees and charges such as processing fees, insurance premium (if applicable), land mortgage deed charges etc. would be set at the discretion of the issuing bank.

    Who is eligible for a Kisan Credit Card Loan Scheme?

    You are eligible for a Kisan Credit Card if you:

    • Are an individual farmer who is an owner-cultivator.
    • Belong to a group and are joint borrowers. The group has to be owner-cultivators.
    • Are a sharecropper, tenant farmer, or an oral lessee.
    • Are a self-help group (SHG) or joint liability group (JLG) of sharecroppers, farmers, tenant farmers, etc.

    Eligible beneficiaries under this scheme under fisheries and animal husbandry are:

    • Inland Fisheries and Aquaculture: Fish farmers, fishers, SHGs, JLGs, and women groups. As a beneficiary, you must own or lease any activity related to fisheries. This includes owning or leasing a pond, an open water body, a tank, or a hatchery among others.
    • Marine Fisheries: You own a registered boat or any other type of fishing vessel and you have the necessary license or permissions for fishing in estuaries or the sea.
    • Poultry: Individual farmers or joint borrowers, SHGs, JLGs, and tenant farmers of sheep, rabbits, goats, pigs, birds, poultry, and have sheds they have owned, rented, or leased.
    • Dairy: Farmers, dairy farmers, SHGs, JLGs, and tenant farmers who own, lease, or rent sheds.

    Documents Required To Apply For Kisan Credit Cards

    As per the Reserve Bank of India (RBI) guidelines, documents required to process a Kisan Credit Card application should be as per the issuing bank’s internal guidelines. Hence, each bank has a different set of required documents.

    Listed below are the basic documents required when applying for the Kisan Credit Card:

    • Duly filled-in and signed-in application form.
    • Copy of identity proof such as Aadhaar card, PAN card, Voter ID, driving license, etc.
    • Copy of address proof document such as Aadhaar card, PAN card, Voter ID, driving license. The proof should have the applicant’s current address to become valid.
    • Land documents.
    • A passport size photograph of the applicant.
    • Other documents such as security PDC as requested by the issuing bank.

    How To Apply For Kisan Credit Card Online?

    Some banks offering Kisan Credit Cards allow you to apply online through their official websites. Follow the below mentioned steps to apply for Kisan Credit Cards online.

    Steps to apply for Kisan Credit Card online:
    • Step 1: Visit the official bank website.
    • Step 2: Choose ‘Kisan Credit Card’ from the available list of credit cards.
    • Step 3: Click on ‘Apply’ button.
    • Step 4: You will be redirected to online application page.
    • Step 5: Fill required fields with accurate details before clicking on ‘Submit’.
    • Step 6: Once the application is submitted, the system will generate an application reference number. Make a note of the same and use it for all future queries.

    If eligible, the bank will process the application and you will call you in 3-4 working days and will let you know further steps in the application process. You will be informed about the documents required to process the application and an appointment will be scheduled for document collection. Following successful verification of the documents submitted, the bank will send the credit card to your registered address.

    Insurance under Kisan Credit Card Scheme

    The Kisan Credit Card provides for personal accident insurance which farmers can opt for. Farmers will receive coverage of up to Rs.50,000 in the event of death and Rs.25,000 in the event of an accident resulting in disability. The premiums payable would be decided by the bank in conjunction with the insurance provider.

    This coverage is optional and farmers who choose to opt for it should meet the eligibility criteria as ascertained by the bank and insurance provider.

    Kisan Credit Cards offered by Top Banks

    Bank Credit Limit Maximum Tenure Insurance Coverage
    Axis Bank Up to Rs.250 lakh (in the form of a loan against the card) 5 years Up to Rs.50,000
    Bank of India Up to 25% of the farmer’s estimated income (but not exceeding Rs.50,000) 5 years N/A
    State Bank of India Based on the crop cultivation and cropping pattern 5 years Personal Accident Insurance Scheme (PAIS), asset insurance and crop insurance
    ICICI Kisan Credit Card As per the bank’s terms and conditions in accordance to RBI guidelines 5 years As per the bank’s terms and conditions in accordance to RBI guidelines
    HDFC Bank Credit limit of up to Rs.3 lakh 5 years Personal Accident Insurance Scheme (PAIS), coverage under National crop insurance scheme for particular crop category, and coverage for failed crop season due to natural calamities or pest attack

    The Kisan Credit Card scheme is a Government of India scheme which provides farmers with timely access to credit. As such, the scheme is offered by all public sector banks.

    • National Payments Corporation of India (NPCI)
    • National Bank for Agriculture and Rural Development (NABARD)
    • Cooperative banks
    • State Bank of India (SBI)
    • Industrial Development Bank of India (IDBI)

    These are just a few banks which offer Kisan Credit Cards. You can apply for one at any public sector bank.

    Kisan Credit Card Customer Care

    In case you have any queries or grievances regarding Kisan Credit Card, you can always contact the Kisan Credit Card Customer Care.

    Kisan Credit Card Loan Scheme FAQs:

    1. What is a KCC loan?

      Kisan Credit Card or KCC is a scheme specifically designed by NABARD to provide farmers with financial support. The short-term loan is intended to help farmers receive timely financial aid and support from the banking system. The money can be used for multiple purposes. These include (but are not limited to):

      • Meet the short-term credit requirements to cultivate crops.
      • Meet any post-harvest expenses.
      • Help the farmer meet household expenses.
      • Meet any working capital requirements when it comes to farming.
      • Make the required investments for agricultural purposes.
      • Meet any marketing expenses with respect to their produce.
    2. What is a crop loan?

      Crop loans provide farmers with necessary credit to help them meet their working capital needs. KCC is a type of crop loan that banks offer. However, the KCC loan can be used for a number of other purposes and not just to meet working capital requirements.

    3. What is the validity period of the Kisan Credit Card?

      This validity period is 5 years. The tenure you do get depends on the type of activity you plan to use the money for.

    4. How can I get a farm loan?

      To get a farm loan, you will need to meet the eligibility criteria set by the bank and provide them with the necessary documents. These documents include identity proof documents and address proof documents.

    5. What is the interest rate applicable on the Kisan Credit Card?

      The interest rate will be left to the discretion of the bank. However, according to the KCC circular dated 20 April 2012, the interest rate is 7% p.a. on short-term credit with a Rs.3 lakh upper limit on the principal amount.

    6. 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).
    7. Is revolving credit facility available on a Kisan Credit Card?

      Yes, revolving cash credit facility is available on these cards for an unlimited number of withdrawals and repayments made within the credit limit.

    8. What security should be provided at the time of application?

      At the time of application, the following security is to be provided:

      • For card limits up to Rs.1 lakh - Hypothecation of crops as per prevailing RBI guidelines.
      • For card limits up to Rs.3 lakh – Hypothecation of crops, additional collateral security at the issuing bank’s discretion.
    9. How do I check my KCC account balance?

      To check the balance in your Kisan Credit Card account, you will have to contact the customer service centre of the public sector bank that has provided you with the Kisan Credit Card. Alternatively, you can visit the bank's branch to check the balance in your account.

    10. How many types of agricultural loans are there?

      Almost every bank in India offers farmers loans to help them meet their financial needs. There are over 15 agricultural loans in India. They are:

      • Fram storage facilities and warehousing loan
      • Farm operating loans
      • Farm ownership loans
      • Fisheries finance program
      • Crop loans
      • Produce marketing loan
      • Loan against warehouse receipts
      • Kisan Shakti Yojana
      • Kisan Credit Card Scheme
      • Land development scheme
      • Minor irrigation scheme
      • Farm mechanization scheme
      • Financing of combine harvesters
      • Land Purchase Scheme
      • Dairy Plus Scheme
      • Broiler Plus Scheme
      • Horticulture finance
      • Agri-Business Heads Scheme
    11. What is the scale of finance in KCC?

      Based on the type of farming you undertake, the KCC limit varies.

      • For single-crop farmers: Sacel of finance for the crop (decided by the District Level Technical Committee) x area cultivated + 10% of limit towards post-harvest or household consumption + 20% towards repairs and maintenance of the farm + crop insurance.
      • The limit for each successive year will be increased by 10%.
      • Farmers with multiple crops: The same pattern is followed as for single-crop farmers.
      • Marginal farmers: Up to Rs.50,000.

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    Kisan Credit Card Reviews

    • SBI Cards Credit Card
      "Excellent card"
      0.5 5.0/5 "Blown Away!"
      I have been using SBI kisaan credit card for long time. This card is given only to the farmer, like they use to give good offers in agriculture products. And they have given me good credit limit they have given me up to 3,00,000 it is sufficient.Their overall service is Excellent.
      Was this review helpful? 119
      , hyderabad
      Reviewed on Jan 31, 2019
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