The Kisan Credit Card scheme aims at providing adequate and timely credit support from the banking system under a single window with flexible and simplified procedures to the farmers for their cultivation and other needs.
The KCC scheme was introduced in 1998 for the issue of Kisan Credit Cards to farmers on the basis of their holdings for uniform adoption by the banks so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs.
The scheme was further extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004.
In 2020 ,Prime Minister Narendra Modi launched the revised scheme to Kisan Credit Card (KCC).
KCC covers post-harvest expenses, produce marketing loan, consumption requirements of farmer households, working capital for maintenance of farm assets and activities allied to agriculture, investment credit requirement for agriculture and allied activities.
Objectives of Kisan Credit Card scheme
- To meet the short term credit requirements for cultivation of crops;
- Post-harvest expenses;
- Produce marketing loan;
- Consumption requirements of farmer household;
- Working capital for maintenance of farm assets and activities allied to agriculture;
- Investment credit requirement for agriculture and allied activities.
The KCC scheme also provides the facility of ATM enabled RuPay Card, one-time documentation, built-in cost escalation in the limit and any number of drawals within the limit
RuPay is an Indian domestic card scheme conceived and launched by the National Payments Corporation of India.
As per information available on the State Bank of India’s website, features of Kisan Credit Card are;
- Type of Facility: Revolving cash credit account. Credit balance in the account, if any, will fetch interest at Savings bank rate.
- Quantum of Loan: Need Based finance considering cropping pattern, acreage and Scale of Finance (SOF).
- Margin: Nil
- Moratorium: Not Available
- Repayment: The repayment period as per the crop period (Short/ Long) and marketing period for the crop.
- Security:Primary: Hypothecation of Crops grown / assets to be created out of Bank finance.Collateral: Equitable mortgage / registered mortgage of land / immovable property as applicable of the value of 100 % loan. However, collateral is waived for KCC limit up to Rs. 1.60 lakhand up to Rs.3.00 lakhs, in case of tie up arrangement.
- Interest Subvention: 3% p.a. interest subvention for prompt borrowers up to Rs. 3.00 lakhs.
- Other:Tenure: 5 years, with 10% annual increase of limit every year, subject to annual review.
- Rupay debit cards for all eligible KCC borrowers.
- Insurance:a. Eligible crops may be covered under Pradhan Mantri Fasal Bima Yojna (PMFBY) on premium payment.b. Borrowers should also opt for Personal Accident Insurance, Health Insurance (wherever applicable).
Eligibility
- All farmers-individuals/Joint borrowers who are owner cultivators.
- Tenant farmers, Oral lessees and Sharecroppers, etc,.
- SHGs or Joint Liability Groups of farmers including tenant farmers, sharecroppers, etc,.
Interest, Fees and Charges :
Up to Rs 3.00 lakhs– 7% per annum as per extant interest subvention scheme of government of India. For interest subvention, submission of Aadhar details to the Bank is mandatory (wherever applicable).
An interest subvention of 3% per annum will be provided to such of those farmers repaying in time, i.e., from the date of disbursement of the loan/s upto the actual date of repayment or upto the due date fixed by the banks for repayment of such loan/s, whichever is earlier, subject to a maximum period of one year from the date of disbursement.
This also implies that the farmers repaying promptly as above would get short term crop loans and/or short term loans for allied activities including animal husbandry, dairy, fisheries, bee keeping etc. at 4% per annum during the financial years 2022-23 and 2023-24.
Above Rs.3.00 lakhs– As applicable from time to time.
Processing fee:
- KCC Limits up to Rs. 50,000/- NIL
- Limits Rs 50,000 to Rs 1.50 lakhs: Rs.200 + GST
- Limits above Rs.1.50 lakhs to Rs.3.00 lakhs: Rs.250 per lakh or part thereof + GST
- Limits more than Rs.3.00 lakhs: 0.35% of loan limit + GST
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