Kisan Credit Card (KCC)

Following are some of the key features and benefits of Kisan Credit Card Scheme:

• KCC is a revolving cash credit account wherein farmers can use credit as per their requirements.
• KCC can be used to cover the cost of crop cultivation, equipment purchase, post-harvest expenses, working capital requirements as well as some requirements of the farmer household.
• Collateral-free loan can be taken under the KCC scheme for amount up to Rs. 1.60 Lakh.
• Maximum loan of Rs. 3 Lakh can be availed under the scheme.
• Government offers interest subvention to borrowers who make prompt payment.
• The repayment period is set as per the harvesting and marketing period of the crop for which the loan amount was taken.
• Up to Rs. 50,000 insurance cover is given against Permanent Disability and Death and a cover of up to Rs. 25,000 is provided against other risks.

Kisan Credit Card interest rates vary from one issuer to another. However, as per the government’s directive, banks also give interest subvention to borrowers who make prompt payment. The interest rates can be as low as 2%. Other fees and charges also vary from bank to bank.

KCC scheme can be availed by:

• All farmers who are either individuals/Joint borrowers of the land and involved in farming or allied activities
• Individuals who are owner cum cultivators
• All the Tenant farmers or Oral lessees and Share Croppers in the agricultural land
• Self Help Groups or Joint Liability Groups including tenant farmers or sharecroppers
• All such farmers who are eligible for short term credit loan towards crop production or any allied activities as well as non-farm activities
• Fish farmers, fishermen and those who are in Inland Fisheries or Aquaculture business including those owning/leasing an open water body, pond or tank
• Individual or joint poultry farmers
• Dairy farmers who own/lease/rent sheds

Note: Farmers should be eligible for a production credit of Rs.5,000 and above, and then he/she is entitled to a KCC. Also, the farmers should be the residents of the bank’s operational area.

People who want to avail a Kisan Credit Card must submit establish their identity & address. Applicants can submit any one of the below given documents.

Proof of Identity	PAN card, Aadhaar card, Driver’s License, Passport, Voter’s ID, Overseas Citizen of India Card, Person of Indian Origin Card, Job card issued by NREGA, Letters issued by the UIDAI
Proof of Address	Aadhaar card, Driver’s License, Passport, Utility Bill not more than 3 month’s old, Ration Card, Property Registration Document, Person of Indian Origin Card, Job card issued by NREGA, Bank Account Statement

Besides this, the bank will also require passport-size photographs and any other document that it deems fit.

Online

Farmers who want to avail Kisan Credit Card online can easily do so by following the below given steps:

• Visit the preferred bank’s website and visit their Kisan Credit Card Section
• Download & print the Application form
• Duly fill out the Application form
• Submit the application and necessary documents at the nearest bank’s branch
• The loan officer will share the necessary information with the applicant
• Once the loan amount is sanctioned the card will be dispatched
• Customers can start using the credit card once they receive the KCC.

Branch Visit

Farmers seeking Kisan Credit Card can also visit a bank of choice and get in touch with a bank official. The official will help the applicant in filling out the form. Afterwards, the loan officer will share the necessary details and process the application.

A Kisan Credit Card (KCC) and a regular credit card works in similar ways with a few differences.

You will get your Kisan Credit Card with a pre-defined credit limit which you can use as and when required. Interest rate will be applicable only on the amount that you have utilized. On making timely payment of the utilized amount, you may be eligible for an interest subvention i.e. a lower rate of interest.

Since KCC offers dynamic loan to the cardholder, they can take out a loan amount as per their needs against a maximum credit limit. This will ensure that they don’t have to pay a large interest associated with a big principal amount taken at once, like in case of a personal loan.

After Budget 2020, the government has taken a major step in the direction of making institutional credit more accessible to the farmers. They are doing this by merging the Kisan Credit Card (KCC) Scheme with the Kisan Samman Nidhi Scheme. The beneficiaries of Kisan Samman Nidhi Scheme will now be able to avail Kisan Credit Card under which they can avail loans for farming at a concessional rate of only 4%.

How to Apply for Kisan Credit Card under PM Kisan Samman Nidhi Scheme

To apply for a Kisan Credit Card under this scheme, the following steps need to be followed:

• A one-page form should be filled which will be available on all commercial banks’ website and also published in all leading newspapers.
• The applicant will have to fill basic information like land record and the crop sown.
• Form can also be filled and submitted at Common Service Centers (CSC) and they are also responsible for transferring the filled forms to the bank branches

Banks have also been instructed to motivate existing customers to avail credit under the scheme.

Bank	Credit Limit	Interest Rate
State Bank of India	Based on the needs and crop production pattern of the farmer	Up to Rs. 3 Lakh – 7% Above Rs. 3 Lakh – As applicable from time to time
Axis Bank	Based upon land under cultivation, cropping pattern & scale of finance	Production credit- 10.70% Investment Credit- 13.30%
HDFC Bank	Based upon land under cultivation, cropping pattern & scale of finance	Average APR of 10.08%
Bank of India	Depends upon the type of crop, area under cultivation and scale of finance	As applicable from time to time

 

Note: All KCC issuing banks offer interest subvention as directed by the government.

What is a Kisan Credit Card Loan?

Kisan Credit Card loan is a Government of India scheme under NABARD that aims to offer farmers loans at low interest rates. The interest rate after subvention can go as low as 2.00%. This will ensure that the farmers do not fall into debt traps or lose out on cultivating crops.

How is Kisan Credit Card Loan amount calculated by the bank?
The loan amount that is extended to the cardholder is decided by the loan officer at the time of application. Various factors are taken into consideration like farm area, expenses related to farming, consumption, etc.

What security/collateral will the bank demand to sanction the loan amount?
Banks won’t demand security or collateral as long as the loan amount is less than Rs. 1.60 lakh. Beyond that, banks can ask for security that it deems fit. Collateral can be in the form of handing over the crops for which the loan was taken out or other assets like tractors, trolleys and so on.

What is the tenure of the loan that can be taken out via Kisan Credit Card?
The maximum tenure can be 5 years.

What interest rate will be applied on the loan amount taken via a Kisan credit card?
Interest rate may depend on the individual applying for the loan. However, customers can use the below given table as a reference.

Kisan Credit Card Interest Rate
Interest Rate at the time of Application	4 % per annum
Interest Rate on Prompt Payment	3% per annum
Interest Rate on Late Payment	7% per annum

Do note that the interest charged will vary from case to case basis and will be dependent on the bank disbursing the amount.

What are the factors in calculating the credit limit of the Kisan Credit Card?
The initial credit limit on the card is offered on the basis of:

• Land area, crop sown, etc.
• Pre & post-harvest expenditure and household requirements.
• Other Expenses required for the maintenance of crop and farm assets which includes crop insurance as well as Personal Accident Insurance Scheme

How Can I apply for this credit card?
In case you are eligible for this card, you may either apply online or obtain an application form by visiting the nearest bank branch or NABARD office. The application form for Kisan Credit Card (KCC) in Hindi is also available for farmers who cannot understand English.

What are the incentive and waivers available on these credit cards?
Banks at their own discretion do not require collateral security as long as the loan amount is less than Rs.1.60 lakh

Interest-on-interest waiver will not be provided on loans extended for agriculture and allied activities

30 October 2020 The interest-on-interest waiver that the government announced will not be provided on loans extended to agriculture and allied activities.

Madras High Court directs banks to postpone implementation of the new system of loan withdrawals to 1st November 2020

28 Aug 2020 The new system for loan withdrawal that requires ‘Mirror Account’ with the respective district central co-operative bank has been postponed till 1 November 2020. The court added that the decision was made in light of the fact that opening a ‘Mirror Account’ and operating an ATM Card cannot be adopted overnight by farmers.

SBI launches Kisan Credit Card Review on YONO Krishi Platform

14 Aug 2020 SBI launched the Kisan Credit Card Review or KCC Review option on YONO Krishi. This feature allows farmers that have a KCC account with SBI to revise their credit limit without having to visit SBI bank branch.

HDFC Launches Shaurya KGC Card

14 Aug 2020 HDFC under its ‘Har Gaon Hamara’ initiative has launched the Shaurya KGC Card. The card is aimed to benefit the agricultural dependent families of armed personnel. The card can be availed by those who are serving in the Army, Navy, Air Force or Para Military Forces. The card provides life cover of Rs 10 lakh, credit for agricultural related expenses and more.

Haryana Minister vows to give Pashu Kisan Credit Cards in next one week

16 July 2020 Haryana’s Animal Husbandry & Dairying Minister J P Dalal said that all the applicants will receive the credit card within the next week. He also said that 1 lakh more applicants can apply for the card till 31st July 2020. These new applicants can expect to receive their credit card within a month post verification.

Kisan Credit Card Benefits to be Extended to Fishing and Animal Husbandry

14th May 2020 Finance Minister Nirmala Sitharaman, in the second part of the economic stimulus package, has promised the below-given measures for farmers. Concession Credit Rate – The government of India will extend 2 lakh crore of credit on a concessional rate to farmers. This will ensure that farming activities are not hampered amidst the pandemic. Extension of KCC to 2.5 crore Farmers – Currently, out of the 9 crore farmers enrolled in PM Kisan Samman Nidhi Yojana, 2.5 crore farmers don’t have Kisan Credit Cards. The government will contact these farmers to extend the KCC benefits to them. Through KCC, they can avail concessional credit and other benefits. Wider Eligibility for KCC – The government has extended the Kisan Credit Card scheme to fishermen and animal husbandry farmers.

Kisan Credit Cardholders can use 10% of the money for household needs

5th May 2020 The Reserve Bank of India has announced that Kisan credit card holders can use their credit cards to pay for their household expenses. The maximum amount that the farmers can use for their household expenses is 10% of the loan amount. This scheme was rolled out to provide relief to the farmers during COVID-19 lockdown.

RBI asks banks to extend Interest subvention and Prompt Repayment Incentive to Farmers

21st April 2020 The Reserve Bank of India (RBI) has asked banks to extend the Interest subvention (2%) and Prompt Repayment Incentive (3%) to farmers if they fail to repay the amount because of the lockdown. Now, farmers won’t be charged a higher rate of interest if they don’t pay the due amount between 1st March 2020 and 31st May 2020. The facility is for farmers who took out a loan of Rs 3 Lakh or less only.

Farmers can get loan up to Rs. 3 Lakh through Kisan Credit Card Scheme

29th Feb 2020 Prime Minister Narendra Modi launched a drive in Chitrakoot UP today to further the goal of meeting financial needs of farmers. More than 25 Lakh beneficiaries of the PM Kisan Samman Nidhi will be provided with Kisan Credit Cards. 2,000+ banks have been given the task. Farmers can avail a loan up to Rs. 1.60 Lakh without collateral at an interest rate of 4%. On making timely payments, the loan amount can be extended up to Rs. 3 Lakh.

Existing Short Term Crop Loans to be converted to KCC Loans

27th Feb 2020 RBI has issued an advisory to all Commercial Banks and Scheduled Commercial Banks to extend the benefits of Interest Subvention (IS) and Prompt Repayment Incentive (PRI) on short-term crop loans only through the Kisan Credit Card Scheme. This will be effective from 1st April 2020. All existing short-term crop loans will be converted to KCC Loans by 31st March 2020.

Government takes CSC’s help to further its KCC Initiative

24th Feb 2020 Government’s e-governance service provider Common Service Centers (CSC) has been roped in to assist the government further its Kisan Credit Card Initiative. Around 3.65 Lakh service centers will be established to enroll eligible farmers under the scheme so that they can get financial support for farming as well as non-farming activities.