KISAN CREDIT CARD(KCC)

Anubhav Dwivedi -

Introduction:

  • In India, agriculture forms the backbone of the economy, providing livelihoods to millions. However, access to credit has been a longstanding issue for farmers. To address this, the government introduced the Kisan Credit Card, (KCC scheme). This article aims to delve into the various aspects of the KCC Scheme, from its objectives to eligibility criteria and benefits.

Objectives:

  • The primary objective of the Kisan Credit Card (KCC Scheme) is to provide timely and adequate credit to farmers for their agricultural and allied activities. It aims to meet the short-term credit requirements of farmers, including the purchase of inputs such as seeds, fertilizers, pesticides, and other agricultural expenses.

Features:

  1. Flexible Credit: The KCC provides flexible credit limits based on the farmer's cropping pattern and production capacity.
  2. Interest Subvention: Farmers receive interest subvention on prompt repayment, encouraging timely repayment of loans. 3% p.a. interest subvention as Prompt Repayment Incentive (PRI) up to Rs. 3.00 lakhs.
  3. Revolving Credit: The KCC offers revolving credit, allowing farmers to borrow, repay, and borrow again up to the approved credit limit.
  4. Insurance Coverage: Eligible crops may be covered under PRADHAN MANTRI FASAL BIMA YOJNA (PMFBY) on premium payment. Borrower should also opt for Personal Accident Insurance, Health Insurance (wherever applicable).
  5. Easy Access: Farmers can access credit through KCCs issued by various financial institutions, including banks and cooperative societies.

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Eligibility:

  1. Farmers: Individuals actively engaged in farming and allied activities, including small and marginal farmers, tenant farmers, and sharecroppers.
  2. Land Ownership: Ownership of agricultural land is not mandatory. Tenants and sharecroppers can also avail of the KCC.
  3. Credit History: A good credit history or repayment track record may be required for some financial institutions.

Documents Required:

  1. Identity Proof: Aadhar Card, Voter ID, Passport, or any other government-issued ID.
  2. Address Proof: Utility bills, ration card, or any document verifying the residential address.
  3. Land Documents: Land ownership documents or lease agreements.
  4. Passport Size Photographs: Recent passport size photographs of the applicant.
  5. Income Proof: Income certificate or documents verifying the agricultural income.

Interest, Fees & Charges:

  1. Interest Rates: For amounts up to Rs. 3.00 lakhs, the interest rate is 7% per annum, subject to the Government of India providing interest subvention. Submission of Aadhar details to the Bank is mandatory for availing interest subvention, wherever applicable. For amounts exceeding Rs. 3.00 lakhs, the interest rate will be as applicable from time to time, subject to changes.
  2. Processing Fees: KCC Limits up to Rs. 3.00 lakhs: NIL. , Limits more than Rs. 3.00 lakhs: 0.35% of the loan limit plus GS (Government Service) charges.
  3. Penalties: Penalties may be levied for late repayments or defaults on KCC dues.

Conclusion:

  • The Kisan Credit Card (KCC) scheme has emerged as a crucial financial tool for farmers, offering them timely access to credit at affordable rates. By streamlining the credit delivery process and providing various features and benefits, the KCC aims to enhance agricultural productivity and improve the financial well-being of farmers across the country. It is imperative for farmers to leverage this scheme effectively to optimize their farming operations and ensure sustainable agricultural growth.

FAQs:

What is the KCC loan scheme?

  • The Kisan Credit Card (KCC) loan scheme is a financial initiative by the Government of India aimed at providing farmers with easy access to credit. It allows farmers to borrow money for agricultural purposes, such as purchasing seeds, fertilizers, and equipment, as well as covering operational costs. The KCC offers flexible repayment options, typically linked to the crop cycle, and helps farmers manage their working capital needs efficiently.

What is maximum Kisan Credit Card limit?

KCC Limits:

  • For loan amounts up to Rs. 3.00 lakhs: NIL.
  • For loan amounts exceeding Rs. 3.00 lakhs: 0.35% of the loan limit + GST.

What is the advantage of Kisan Credit Card?

Benefits of the Kisan Credit Card Scheme:

  • Loan Amount: Farmers can avail loans of up to Rs. 3 lakh.
  • Insurance Coverage: The scheme offers insurance coverage of up to Rs. 50,000 in the event of permanent disability or death.
  • Debit Card and Savings Account: Eligible farmers may receive a debit card along with a savings bank account for easy access to funds.
  • Flexible Repayment Options: The scheme provides multiple and flexible repayment options, catering to the diverse needs of farmers.

What is KCC in bank account?

  • The Kisan Credit Card (KCC) scheme, introduced in 1998, aimed to provide farmers with a uniform system for obtaining credit cards based on their land holdings. This facilitated easy access to funds for purchasing agricultural inputs like seeds, fertilizers, pesticides, and also for withdrawing cash for their production requirements.

What does KCC mean?

  • KCC, or Kisan Credit Card, is a specialized credit card provided to farmers by the Indian government. Its primary aim is to offer financial support to farmers, enabling them to fulfill their agricultural requirements effectively.

Who is eligible for KCC loan?

Eligibility Criteria for Kisan Credit Card Loan Scheme:

  • Age Range: Applicants must be between 18 and 75 years old.
  • Landholding: Farmers must possess land for agricultural purposes.

What is KCC limit?

  • Most farmers utilize KCC to obtain loans for sowing crops or purchasing agricultural equipment, which they typically repay at harvest time. The KCC limit varies for farmers depending on several factors. For marginal farmers and sharecroppers, the KCC limit generally ranges from Rs. 10,000 to Rs. 50,000.

What is KCC interest rate?

  • SBI Kisan Credit Card: Up to 7% p.a.
  • PNB Kisan Credit Card: 7%
  • HDFC Bank Kisan Credit Card: 9%
  • Axis Bank Kisan Credit Card: 8.85% to 13.10%
  • Mahabank Kisan Credit Card: 7%
  • Indian Overseas Bank Kisan Credit Card: 7% (interest subvention provided)
  • UCO Bank: 7% (interest subvention provided)

What is KCC subsidy?

  • The Government of India offers a 2% interest subvention and a 3% Prompt Repayment Incentive to farmers. This effectively reduces the credit rate to a highly subsidized 4% per annum. Furthermore, the scheme was extended to cover the investment credit needs of farmers.

What is benefit of KCC?

  • Farmers are issued an ATM cum credit card with which they can withdraw cash from ATMs. The KCC typically provides a 12-month repayment period, allowing farmers sufficient time to settle their debts. The limit for KCC is determined based on factors such as the crops cultivated, scale of finance, and maintenance expenses.

What is the minimum land limit for KCC?

  • The minimum irrigated land required for KCC eligibility is 2 acres, while the maximum allowable limit is set at 1000 acres.

What is the minimum and maximum loan under KCC?

  • The loan amount is determined based on the cropping pattern, acreage, and Scale of Finance (SOF). There is no minimum or maximum ceiling for the loan, as it is need-based and can vary depending on the specific requirements of the borrower.

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