Kisan Credit Card is a pioneering initiative to provide timely and assured credit facility to the farmers. Via this credit delivery innovation, the farmers are provided with credit card and a passbook or a credit card cum passbook carrying all the key details of the applicant such as their name, address, details of land holding, validity, borrowing period and much more. Kisan Credit Card is a simple and flexible process that takes care of the short-term, medium-term and long term financial needs of those who are engaged in agriculture and allied activities. Know more about this highly beneficial initiative down below!
Brief history of Kisan Credit Card
The idea of the Kisan Credit Card Scheme was initiated in the Budget Speech of the year 1998-1999 by Mr. Yashwant Sinha, the then Finance Minister. As per the speech, NABARD was to formulate a model scheme for the issuance of KCC Scheme to those associated with agriculture and allied activities on the basis of their land holding. This initiative was to allow the farmers an unhindered access to financial aid for the purchase of agricultural inputs such as seeds, pesticides and the likes. This scheme was expected to take care of the production needs of the farmers. After the formulation of Model Kisan Credit Card Scheme by NABARD, the scheme was circulated to commercial banks by the RBI and to cooperative banks by NABARD.
Features of Kisan Credit Card
The major features of KCC are:
- The eligibility criteria for this scheme includes marginal farmers, share croppers and tenants.
- With This scheme, the process of screening and credit delivery gets simplified. This is an excellent initiative for the farmers who are not aware of banking facilities and financial aids that they can avail.
- It involves simple and one-time documentation. The subsequent documentation is done on various criteria such as the declaration of the farmer for crops to be raised and the likes.
- The credit limit for each applicant differs under this scheme and is based on the land holding, credit history and income of the farmer.
- It offers quick, accurate and on-time credit facility to the farmers.
- This scheme provides the applicants with flexible repayment options and allows rescheduling of repayments if the need be.
- This financial facility can be used to withdraw cash and take loans as well.
- It also provides for an insurance coverage to the applicants.
- This scheme takes care of all financial needs of the farmers pertaining to the agricultural practices and requirements.
Benefits of Kisan Credit Card
Below are listed some of the major benefits of KCC.
- The scheme bears easy and convenient disbursement procedures.
- The facility assures on-time and assured credit availability to the applicants.
- Wards off any rigidity regarding cash and/ or kind.
- The facility can be availed at once for multiple crops.
- The scheme provides credit assurance at anytime.
- Bears lower interest rates than any other credit facility.
- The utilisation of credit amount rests to the will and wish of the applicant.
- The applicants can avail the credit facility for up to 3 years.
- The scheme allows maximum credit facility based on an agricultural income.
- The applicants can withdraw without any restrictions within the credit limit.
- The applicants need not worry about the repayment of the loan until the harvest is done.
- The applicants can withdraw cash, procure inputs and use the credit amount for agricultural and production purposes.
Eligibility for Kisan Credit Card
The following eligibility criteria is preferred by the banks before the issuance of KCC.
- The applicant must be associated with agricultural and allied activities. The facility can be extended irrespective of the fact whether the applicant is an individual or a joint borrower who is an owner cultivator.
- Tenant farmers, oral lessees and share croppers are also eligible for this scheme.
- Farmers belonging to SHGs and Joint Liability Groups can also make use of this scheme.
Documents required for Kisan Credit Card
The following documents would be required in order to avail the Kisan Credit Card:
- Completely filled application form
- Proof of Identity
- Proof or Residence
Documents such as Voter ID, PAN Card, Driver’s License, Aadhar Card and Passport can be used as a proof of identity and/ or residence.
Fixation of credit limit
The credit limit is determined as per the need and financial capability of the farmers.
- For Marginal Farmers: For Marginal Farmers, a flexible credit ranging from ₹ 10,000 to ₹ 50,000 can be provided as a Flexi KCC. The determination of this credit facility would depend upon landholding, choice of crops, post harvest storage needs, farm expenses, consumption needs and much more.
- For farmers other than marginal farmers: For farmers other than marginal farmers, the credit limit available is as follows:
- Short Term Limit for 1 year
- Credit Limit for Second and subsequent years
- Term Loans: term Loans are usually availed for purpose of land development, minor irrigation, purchase of farm equipments and other agricultural activities. This loan facility is ascertained based on the unit cost of the proposed assets that are to be acquired by the farmer, the ongoing allied activities on the farm, repayment capacity of the farmer and total loan on the farmer.
Validity and Renewal Policy of Kisan Credit Card
The validity period and renewal policy rests at the discretion of the banks who offer the facility and may differ accordingly. The extension and rescheduling of the repayment period on account of a natural calamity or a bad crop would take place along with the extended amount of limit. In case the proposed extension period is more than one crop season, the cumulated debits are to be transferred to a separate term loan account with repayment to be divided into installments.