Kisan Credit Card

India's agricultural sector has been the lifeline of the nation for centuries, providing sustenance and livelihoods to millions. The Government of India recognizes the pivotal role farmers play in the country's economy and has taken several initiatives to support them. One such initiative is the Kisan Credit Card (KCC) scheme, a financial lifeline that empowers not only farmers but also individuals engaged in fisheries and animal husbandry. The KCC scheme helps them with affordable and timely credit without having to be at the mercy of unscrupulous moneylenders who charge exorbitant interest rates.

This visionary initiative was introduced by the National Bank for Agriculture and Rural Development (NABARD) and primarily serves as a channel for providing short-term credit. Under the KCC scheme, farmers can avail loans at interest rates as low as 2% per annum. This remarkable feature makes KCC an indispensable financial tool for India's rural population.

Kisan Credit Card Features and Benefits

KCC is designed to cater to the diverse financial needs of India's farmers and rural entrepreneurs. Here are some of the key features and benefits of KCC:

1.Revolving Cash Credit: KCC operates as a revolving cash credit account, enabling farmers to access funds as per their requirements. This flexibility ensures that farmers have the necessary financial resources when they need them the most.

2.Versatile Usage: KCC funds can be utilized for various purposes, including covering the costs of crop cultivation, purchasing equipment, managing post-harvest expenses, fulfilling working capital requirements, and even addressing household needs.

3.Collateral-Free Loans: One of the most appealing aspects of the KCC scheme is that it offers collateral-free loans for amounts up to Rs. 1.60 lakhs. This relieves farmers from the burden of providing security for their loans.

4.Higher Loan Limits: The KCC scheme allows for a maximum loan amount of Rs. 3 lakhs, ensuring that farmers can access substantial credit support for their agricultural and allied activities.

5.Interest Subvention: The government offers interest subvention to borrowers who make prompt payments, reducing the cost of borrowing for farmers.

6.Flexible Repayment Period: The repayment period under the KCC scheme is intricately linked to the harvesting and marketing period of the crop for which the loan was taken. This alignment ensures that farmers are not burdened with excessive repayment demands during non-harvest periods.

7.Insurance Cover: KCC also offers insurance benefits, providing coverage against permanent disability and death (up to Rs. 50,000) and protection against other risks (up to Rs. 25,000). This is an essential safety net for farmers facing the uncertainties of agricultural life.

Kisan Credit Card Interest Rates

Interest rates under the Kisan Credit Card scheme may vary among different banks and financial institutions. However, as per government directives, banks offer interest subvention to borrowers who make timely payments, allowing interest rates to be as low as 2%. It's worth noting that other fees and charges associated with KCC may differ from one bank to another.

Kisan Credit Card Eligibility Criteria

The Kisan Credit Card scheme is inclusive and caters to a wide range of individuals involved in farming and related activities. The eligibility criteria for KCC are:

• Individuals involved in farming - This includes owner-cum-cultivators, tenant farmers, oral lessees, and sharecroppers.
• Self-Help Groups and Joint Liability Groups - These groups, including tenant farmers and sharecroppers, are eligible for KCC.
• Farmers eligible for short-term credit - Individuals engaged in crop production, allied activities, and non-farm activities can avail the KCC benefits.
• Fish farmers and fishermen - Those involved in inland fisheries, aquaculture, and open water body or pond ownership/leasing.
• Poultry and dairy farmers - If they own, lease, or rent sheds for their operations.

It's important to note that farmers are eligible for a KCC if they meet the criteria for a production credit of Rs. 5,000 or above and reside within the bank's operational area.

Documents Required for KCC

Obtaining a Kisan Credit Card requires individuals to provide proof of identity and address. The following documents are acceptable:

Proof of Identity:

Proof of Address:

In addition to these documents, banks may require passport-size photographs and any other documentation they deem necessary to complete the application process.

How to Apply for Kisan Credit Card

Applying for a Kisan Credit Card is a straightforward process, with both online and in-person options available:

Online Application:

1. Visit the website of your preferred bank and navigate to the Kisan Credit Card section.

2. Download and print the KCC application form.

3. Fill in the KCC application form with the required details.

4. Submit the completed application form and necessary documents at the nearest bank branch.

5. A loan officer will guide you through the process and provide the necessary information.

6. Once your loan amount is sanctioned, the KCC will be dispatched to you.

7. You can start using the credit card once you receive it.

In-Person Application (Branch Visit):

1. Visit the bank branch of your choice.

2. Get in touch with a bank official who will assist you in filling out the application form.

3. The loan officer will provide essential information and process your application.

How Does a Kisan Credit Card Work?

The Kisan Credit Card operates in a manner similar to a regular credit card but with some key distinctions:

• The cardholder is assigned a pre-defined credit limit that can be utilized based on their needs.
• Interest is only applicable to the utilized amount. Timely repayment can qualify the cardholder for interest subvention, resulting in a lower interest rate.
• The dynamic loan feature allows cardholders to withdraw funds as needed, avoiding excessive interest costs associated with large lump-sum loans.

PM Kisan Samman Nidhi

The government's commitment to supporting farmers extends beyond the Kisan Credit Card scheme. After the 2020 budget, a significant step was taken to merge the Kisan Credit Card scheme with the Kisan Samman Nidhi Scheme. This merger allows beneficiaries of the Kisan Samman Nidhi Scheme to access Kisan Credit Cards and obtain loans for farming at a concessional rate of only 4%.

How to Apply for a Kisan Credit Card through the PM Kisan Samman Nidhi Scheme

• Fill out a one-page form available on all commercial banks' websites and published in leading newspapers.
• Provide basic information about land records and crops sown.
• Submit the form at Common Service Centres (CSC) responsible for forwarding the forms to bank branches.
• Banks are encouraged to motivate existing customers to avail credit under the scheme.

FAQS on Kisan Credit Card