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About Kisan Credit Card
A Kisan Credit card has been specially designed to provide farmers of the country a financial support. The scheme which was launched in 1998 aims to tackle the comprehensive financial needs of the agricultural sector by offering term loans. The model was developed by National Bank for Agriculture and Rural Development. Various commercial banks, state co-operative banks and regional rural banks are the participatory members who provide the card. A Kisan credit card will help the farmer to secure timely credit at reasonable rates of interest in a hassle free manner. The farmer won’t be required to appear for the continuous screening process which is undertaken by the banks for giving term loans. A farmer can take maximum advantage of a Kisan credit card. He will be provided with a passbook which will have his name, credit limit, photograph, validity and details of his land holding. The card is issued on the basis of certain factors like timely payments of the past loans and land holdings one has in his name. The basic idea behind the card is to ensure that farmers in the country are given adequate credit under one single window.
Objective of a Kisan Credit Card
Farmers in India, often depend on non-institutional and informal sources of credit so that they can buy the farm inputs. Many of them are not even part of the domain of formal banking. As a result, they end up paying a lot more as interest to the money lenders. This creates a vicious web of debt for the farmers when they are unable to pay the huge interest to the lender. To tackle the same, a Kisan credit card has created so that the farmers are able to meet their cultivation needs on time. Farmers can use the credit to purchases inputs like pesticides, high yielding variety of seeds and fertilizers. In addition to this, they can also use the card to withdraw cash as per their need.
Benefits of a Kisan Credit Card
There are several benefits which are attached to a Kisan credit card.
- The process to disburse credit to the farmers has become easier and even those who are illiterate have benefited from the same.
- The farmer gets flexibility when it comes to repaying the loan amount.
- There is a provision to increase the credit limit depending upon the agricultural income.
- The card holder gets the facility of insurance which can provide protection to the notified crops as they are covered under the Crop Insurance scheme. Certain types of crops are covered under the same.
- The rates of interest are comparatively lower when compared to other ifnormal sources of credit.
Kisan Credit Card Eligibility
The following are eligible to apply for a Kisan credit card.
- Farmers-Individuals/Joint borrowers who are owner-cultivators.
- Self Help Groups or Joint Liability Groups of farmers which include tenant farmers, share croppers etc.
- Tenant farmers, Share Croppers and Oral lessees etc.
Kisan Credit Card Documents required
The farmer will be required to furnish certain documents in order to get the card. The list of documents has been given below.
- Completely filled application form
- Proof of Identity- Aadhar Card/ PAN card/ Voter ID card/ Driving License/ Passport
- Proof of Address- Voter ID card/ Electricity bill/ Aadhaar card/ Lease agreement
Leading Banks which provide a Kisan Credit Card in India
There are many prominent banks in India which provide the farmer a Kisan credit card at a reasonable rate of interest. State Bank of India, the leading public sector bank in India, offers a farmer the same so that they are able to meet all kinds of cultivation expenses along with contingency expenses. Bank of India provides the card to eligible farmers who come under the operational branch in the area. Axis Bank also offers the farmers of the country a Kisan credit card so that they can meet their multiple needs. The need can be related to buying of seeds, repairing of the farm machinery or even for the marriage of the children.
Benefits to the participatory banks
The scheme has proved to be valuable to the participatory banks as they have received various benefits. The benefits have been mentioned below.
- Employees of the the banks in the rural branches will be able to reduce their workload as their is no duplication in terms of processing of the loan papers. The need for repeated checking of the papers has been eliminated under this scheme.
- The process of documentation and disbursement has been simplified under the scheme. The need to maintain minimum paperwork has helped saved the banks a good chunk of time.
- The cost of transaction has been reduced to a greater extent, which has proved to very beneficial to the banks.
- The scheme has bridged the gap between the bank and the client (here the farmer) and cemented a very strong relationship. The farmer is now part of the circle of the formal banking.