Kisan Credit Card Scheme is a Government scheme aiming to offer short-term credit to farmers and individuals from the farming, fishing, and animal husbandry industry. This loan money can be used to purchase equipment as well as meet other daily requirements. NABARD created the Kisan Credit Card (KCC) scheme to shield farmers from the excessive interest rate charged by lenders in the unorganized lending industry, prevalent in the Indian villages.
With the KCC scheme, farmers can take advantage of interest rates as low as 2% per year. Furthermore, the repayment period is determined by the period of harvesting or marketing the crop from the amount of loan obtained, making it even more favorable and beneficial to the farmers.
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Benefits of Kisan Credit Card
Here are a few most important features and benefits that are part of the Kisan Credit Card (KCC) Scheme:
- KCC is an account for cash revolving, which allows farmers to access credit according to their needs.
- KCC could be utilized to finance the cost of cultivation and equipment purchases, post-harvest costs, the requirements for working capital, and other needs for the farm household.
- Up to Rs. 50,000 insurance protection is offered against permanent disability or death, and coverage as much as Rs. 25000 is offered against other risks. Eligible KCC applicant and crops are covered under PRADHAN MANTRI FASAL BIMA YOJNA (PMFBY) of GOI.
- A maximum loan amount of Rs. 3 Lakh is available in the KCC scheme.
- A collateral-free loan is possible in the KCC scheme, which is up to the amount of Rs. 1.60 Lakh.
- The government offers interest subventions for borrowers who pay on-time payments.
- The repayment time frame is determined by the period of harvesting and marketing of the crop from the loan amount taken.
Kisan Credit Card Eligibility Criteria
Applicant farmers should be eligible for a production credit of Rs.5,000 and over, which means they are eligible for a KCC. In addition, the farmers should reside within the bank’s operational zone.
KCC scheme is accessible through:
- Farmers who are individuals or Joint borrowers of farm and engaged in agriculture or related activities like poultry, dairy, fisheries and animal husbandry.
- People who are owners cum cultivators.
- All tenant farmers or the oral lessees and sharecroppers on the land for agriculture.
- Self Help Groups (SHGs) or Joint Liability Groups that include tenants, sharecroppers or farmers.
- All farmers can qualify for a short-term credit loan for the production of crops or other allied activities as well as other non-farm activities.
- Fish farmers, fishermen, and those in the Inland Fisheries or Aquaculture business which includes those leasing or owning an open-water body or tank, pond, or pond.
- Dairy farmers who have their own sheds, lease or who rent them out.
- Farmers of poultry, whether joint or individual.
Kisan Credit Card (KCC) Interest Rates
Kisan Credit Card interest rates differ from one issuer to another. But, by the government’s guidelines, banks offer interest subventions for borrowers who pay timely payments. The interest rates for KCC loan could be as low as 2%. Other applicable charges and fees differ from bank to bank.
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Documents Required For KCC
The people who wish to use the Kisan Credit Card must submit proof of identity and address. The applicants can offer any of the documents listed below:
Identity Proof
- PAN Card
- Aadhaar card
- Passport
- Voter Card
- Driver’s License
- Overseas Citizen of India Card
- Employment card issued by NREGA
- Letters issued by UIDAI.
Address Proof
- Aadhaar card
- Passport
- Driver’s license
- Ration Card
- Utility bill not older than 3 months
- Property Registration Document
- Person of Indian Origin Card
- Employment card issued by NREGA
- Bank Account Statement
Apart from this, the bank will need passport-sized photographs as well as any other document it believes is appropriate.
How to Apply for Kisan Credit Card?
Online Application
Farmers who wish to apply for Kisan Credit Card online can effortlessly do so by following these simple steps:
- Visit the preferred bank’s site and then visit the Kisan Credit Card (KCC) Section.
- Download and print the KCC application form from here.
- Fill in the application form completely.
- Make sure to submit the application and all the essential documents to the closest branch of the particular bank.
- An officer from the bank will communicate all the required information to the applicant farmer.
- After the loan amount has been approved, the bank will dispatch the Kisan Credit Card to the provided address.
- Applicant farmers are able to use credit cards once received.
Visit Your Nearest Branch to Apply for KCC
Farmers who want to apply for Kisan Credit Card can also go to a bank of their choice and speak with an official from the bank. The bank official will assist the customer in filing the application. After that, the loan agent will give the information needed and then process your KCC application.
What is the Purpose of a Kisan Credit Card?
The Kisan Credit Card (KCC) and a normal bank credit card function in the same way but with some minor variations.
You will be issued a KCC with a pre-determined credit limit you are able to use whenever you need to. The interest rate will be based only on the amount you have used. If you pay in time, the amount used up by you might be qualified for an interest subvention i.e., lower interest rates.
Because KCC provides a dynamic credit to its cardholders, who are able to take out an amount that meets their needs and have a limitless credit limit. This ensures that they do not have to pay a huge cost of interest for a vast principal amount at once, as in the case of personal loans.
PM Kisan Samman Nidhi
In Budget 2020, the Government of India has taken an essential move toward making credit from institutions more accessible to farmers. They combine the Kisan Credit Card (KCC) Scheme and the Kisan Samman Nidhi Scheme. The beneficiaries of the Kisan Samman Nidhi Scheme will be able to apply for the Kisan Credit Card. They will be able to get loans to farmers at a concessional rate, just 4 percent.
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Applying Kisan Credit Card Scheme Under PM Kisan Samman Nidhi Scheme
The banks have also been asked to convince existing customers to take advantage of credit through the scheme. To be eligible for an Kisan Credit Card scheme under PM Kisan Samman Nidhi Scheme, the following steps have to be taken:
- A one-page form must be completed and accessible on every commercial bank website and featured in the major newspapers.
- The applicant must fill in basic details like the land records and the type of crop to be sown.
- KCC application forms can also be filled out and returned to Common Service Centers (CSC), and they are also accountable for transferring the completed forms to bank branches.
All Major Indian Banks Offer Kisan Credit Cards (KCC)
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Bank |
Credit Limit |
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Based on the requirements and the pattern of crop production of the farmer. |
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Based on crops, land under cultivation patterns, and size of finance |
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Based on crops, land under cultivation pattern, and the size of finance |
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Based on the type of crop, the area under cultivation, and the size of the finance |
All Indian banks provide interest subsidies through Kisan credit Card, as per the directives of the Government of India.
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Kisan Credit Card – Frequently Asked Questions (FAQs)
Q.1: What is a Kisan Credit Card (KCC) Loan?
Answer: Kisan Credit Card (KCC) loan is a Government scheme under NABARD, designed to provide farmers with loans at low rates of interest, as low as 2 percent. This ensures that farmers are not caught in debt traps.
Q.2: How to apply for KCC?
Answer: Interested applicants can apply online or pick up an application form at the nearest branch of the bank as well as the NABARD office. The KCC application form is available in Hindi also, for applicant farmers who do not speak/understand English.
Q.3: What is the term of the loan which can be obtained using Kisan Credit Card?
Answer: The maximum length of tenure of the Kisan Credit Card loan is five years.
Q.4: How do banks calculate Kisan Credit Card Loan amount?
Answer: The loan amount granted to the KCC cardholder is determined at the lending officer’s discretion during the application process. A variety of aspects are considered, like the farm area, the expenses associated with the farming process, consumption, etc.
Q.5: What rate of interest is applicable on the loan amount taken through the Kisan Credit Card (KCC)?
Answer: The rate of interest may be contingent on the person who is applying for the loan. However, the interest charged will differ from the case base and depend on the bank’s decision.
Q.6: What collateral or security is required by the bank in order to approve the KCC loan?
Answer: Banks will not require security or collateral, as long as the loan amount is not more than Rs. 1.60 lakh. Beyond that, banks may require security that it considers appropriate. It could take the form of the transfer of the crops to the purpose of which the loan was made or other assets such as trolleys, tractors, and the like.
Q.7: What are the main factors of the calculation of the credit limit for the Kisan Credit Card?
Answer: A credit line of initial size for the card is determined by a combination of
- The land area, the crop that is sown.
- Post-harvest and pre-harvest expenses as well as household demands.
- Other costs necessary for the maintenance of the farm and crop assets include insurance for crops and the Personal Accident Insurance Scheme.
Q.8: What are the waivers that are available with Kisan Credit Cards?
Answer: Issuing banks, at their discretion, don’t ask for collateral security, for the loan amount lower than Rs.1.60 lakh.
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