A Kisan Credit card (KCC) has been specially designed to provide farmers of the country financial support. The scheme was launched in 1998 by National Bank for Agriculture and Rural Development to tackle the comprehensive financial needs of the agricultural sector by offering term loans. 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 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 the banks undertake for giving term loans. A farmer can take maximum advantage of a Kisan credit card. The bank will provide the farmer with a passbook that will have his name, credit limit, photograph, validity, and details of his landholding. It will help him keep track of his transactions. The card is issued on the basis of certain factors like a timely payment 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 Credit Card
For a long time, small farmers have been exploited in the hands of wealthy landlords, non- institutional creditors and moneylenders in the name of loans to meet their farming expenses and buy 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, who find it hard to pay off the same to the lender. To tackle the same, a Kisan credit card has been created so that the farmers can meet their cultivation needs on time. Farmers can use the credit to purchase inputs like pesticides, high yielding variety of seeds and fertilizers.
In addition to this, there are various objectives to Kisan credit card as indicated below:
- To help meet the short term credit requirements for cultivation of crops, animal husbandry and fisheries.
- Meet consumption requirements of farmer household.
- To provide post-harvest expenses and produce marketing loans.
- To help meet the working capital need to maintain farm assets and activities allied to agriculture.
Benefits of a Kisan Credit Card
There are several benefits available in a Kisan credit card and they are:
- The process to disburse credit to the farmers has become more accessible, and illiterate people have primarily 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 crops as they are comes under the Crop Insurance scheme. Certain types of crops are there under the same.
- The rates of interest are comparatively lower in the comparison to other regular 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 are here 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 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.
Kisan Credit Card Application
You can apply for the card visiting the nearest branches of banks such as SBI. Contact the officials over there and ask for a Kisan Credit Card application form, fill it and submit the same along with relevant documents to process your case. The bank, after checking the details correctly, would issue you a credit card.
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 banks in the rural branches will be able to reduce their workload as there is no duplication in terms of processing of the loan papers and this scheme also helps to eliminate the need for checking of the papers repeatedly.
- 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.
Credit limit in cash on the Kisan Credit Card
The cash credit limit is set differently by different lending banks. If you want to know how much you can get, you can contact and compare different bank limits. You can also negotiate credit limits, so in case you pay your credits on time, you can get your credit limit revised. Generally, the institutions sets credit limit keeping in mind factors such as the farmer’s income and repayment history. Financial institutions would take into account the type of crop and area cultivation of the crop.
Some of the prominent banks offering Kisan credit cards under the following schemes:
SBI Kisan Credit Card
Many borrowers prefer SBI for Kisan credit cards. SBI waives collateral security for the KCC limit of up to INR 1.60 Lakh and up to Rs.3 Lakh in case of a tie-up. Other features of this credit card are below:
- Tenure: valid for 5 years, with a 10% annual increase of limit every year, subject to annual review Repayment: The repayment period as per the crop period (Short/ Long) and marketing period for the crop.
- Interest Rate:
- Up to INR 3.00 Lakh – 7%
- Above INR 3.00 Lakh – As applicable from time to time.
HDFC Kisan Credit Card
HDFC offers a lot of benefits on its Kisan credit card and it also issues a Cheque book with a credit limit of INR 25,000, offers a higher credit limit for farmers with good credit scores and lends at a low-interest rate to farmers with a good credit score. Other features of the HDFC Card are as under:
- Credit Limit:- Maximum credit limit of INR 3 lakh (Higher credit limit for farmers with good credit scores)
- Tenure:- valid for five years.
- Interest Rate:- At an average of around 9 %( Subsidies on interest rates to farmers with good credit scores)
Axis Bank Kisan Credit Card
Axis bank offers a Kisan credit card which can be helpful to meet multiple needs. The borrower can enjoy the facility to choose between cash or term loan credit, repayment flexibility, and a hassle-free renewal process. Other features of Axis bank Kisan card are below:
- Credit Limit:- Axis Bank customers can get loans to a maximum of Rs. 250 lakhs.
- In Case of Cash Credit:- 1 Year
- In Case of Term Loan:- 7 Years
- Interest Rate:- 8.85% to 14.10%
- Loan Tenure:- Fixed after considering the harvesting and marketing of crop.
Central Bank of India Kisan Credit Card
Central bank of India offers Kisan credit cards with no margin requirement, no collateral up to 1.60 Lakh, and up to 3 Lakh in case of a tie-up. For loans up to INR 3 lakh, it does not charge a processing fee. Additional features include the following:
- Collateral: No collateral for up to 1.60 Lakh.
- You will need a Collateral on above 1.60 Lakh
- Interest Rate:-
- Loan up to 3 Lakh – 7%
- 3 Lakh – 10 Lakh – MCLR + 2.50%
- 10 Lakh – 100 Lakh – MCLR + 3.00%
- Repayment – As per the harvesting and marketing of the crop.
Frequently Asked Questions
1. What is a KCC?
KCC is the Kisan Credit Card issued by multiple banks to farmers through which a farmer can apply for a loan at an affordable rate of interest. He can use the loan for cultivation, purchasing fertilizers, pesticides, and doing many other farming activities. The farmers get flexible tenure on the KCC to repay their loans. This credit card also gives you insurance for the crops.
2. What is the full form of KCC?
The Full Form of KCC is Kisan Credit Card and it is issued to our Indian Farmers. This scheme was launched in 1998 by the National Bank of Agriculture and Rural Development in order to fulfill the financial needs of the farmers.
3. How to apply for Kisan Credit Card?
You can apply for the Kisan Credit Card by visiting the nearest branch of any bank that issues KCC. Then you will just have to fill out the application form for the card and submit it to the representative. After reviewing the application and the documents, the bank will issue the Kisan Credit Card.
4. How to Check KCC loan status?
You can check the KCC Loan status through the official website of the CSC PM KCC portal. On the other hand, you can also check the loan status by visiting the official website of the issuer from where you have applied for the Kisan Credit Card.
5. For how many years has the Kisan Credit Card been issued?
The tenure of the Kisan Credit Card differs from bank to bank. Every bank gives you the Kisan Credit Card for a different number of years. Usually, the maximum years given for the Kisan Credit Card is 7 years.
6. Who is eligible for the Kisan card?
The following individuals are eligible to apply for the Kisan Card:-
- Farmers or individuals who are joint cultivators or owners.
- Tenant Farmers
- Oral lessees
- Share Croppers
7. What happens if the KCC account holder dies?
If the KCC account holder dies then the family is entitled to get a compensation of INR 50,000. The KCC account holder is entitled to get INR 50,000 in case of loss of both limbs, both eyes, or one eye and one limb.
8. What is the credit limit of KCC?
The credit limit of the Kisan Credit Card varies from bank to bank. You can borrow a debt of up to INR 2.5 Crores from some financial institutions. So, the credit limit depends on the institution from which you are applying for the KCC
This blog helped you know the basics of the Kisan credit card scheme, the benefits and documents required on applying, and various banks offering Kisan credit cards. One thing to keep in mind before applying is that you need to compare multiple banks to conclude from where you should apply for a credit card.