Kisan Credit Card (KCC)

Key Objectives of Kisan Credit Card

The Kisan Credit Card (KCC) scheme is designed to provide farmers with timely and adequate credit through a single-window banking solution. It simplifies access to financial support, ensuring seamless credit availability across India.

Key Objectives of the KCC Scheme are:

1. Short-Term Credit for Crop Cultivation - Covers expenses for seeds, fertilisers, pesticides, and other essential inputs.
2. Post-Harvest Expense Coverage - Supports storage, transportation, and processing costs after harvesting.
3. Produce Marketing Loans - Helps farmers store and sell produce at better prices, reducing dependency on intermediaries.
4. Household Consumption Needs - Provides credit for essential expenses like food, education, and healthcare.
5. Working Capital for Farm Maintenance - Funds repairs and upkeep of machinery, equipment, and infrastructure.
6. Support for Allied Agricultural Activities - Extends credit for animal husbandry, poultry, fisheries, and agro-processing.
7. Investment Credit for Long-Term Growth - Facilitates funding for land development, irrigation, mechanisation, and infrastructure.

Features of Kisan Credit Card

The following is the list of key features of KCC:

1. Offers a repayment period of 12 months.
2. Comes with an ATM cum credit card for cash withdrawals.
3. Credit limit ranges from Rs.10,000 to Rs.50,000 based on crop type and expenses.
4. Loan repayment can be done after harvest.
5. Allows repayment rescheduling if crops are damaged due to natural calamities.
6. Credit limit increases annually based on repayment history.
7. Valid for up to three years without seasonal appraisal.
8. Ensures a simple and hassle-free documentation process.

Benefits of Kisan Credit Card Loan Scheme

The Kisan Credit Card (KCC) scheme is designed to help farmers get timely and hassle-free credit for their agricultural needs. Here’s how it benefits them:

Overview of the Kisan Credit Card Scheme

The following are the different loan aspects of Kisan Credit Scheme:

Interest and Other Charges on Kisan Credit Cards

The interest rate for the Kisan Credit Card (KCC) scheme is determined by individual banks, meaning each bank has the flexibility to set its own rate based on its internal policies. However, as per the KCC circular issued on 20 April 2012, the government provides a standardized interest rate of 7% per annum on short-term agricultural loans up to Rs. 3 lakhs. This ensures that farmers receive credit at an affordable rate for their farming activities.

Additionally, farmers who repay their loans on time are eligible for an interest subvention and a prompt repayment incentive, further reducing their effective interest rate. These benefits help make agricultural credit more accessible and affordable, reducing the financial burden on farmers and promoting timely loan repayments.

Factors Influencing Kisan Credit Card Interest Rates

The following factors influence the interest rates of Kisan Credit Card:

1. Loan Amount: Loans up to Rs.3 Lakhs typically have lower interest rates as they are considered less risky for banks. Borrowing beyond this amount increases the risk for banks, leading to higher rates to mitigate the risk involved.
2. Interest Subsidy: Banks provide 2-3% interest subsidies on loans up to Rs.3 Lakhs to make credit more affordable for farmers, in line with RBI schemes. This reduces the financial burden on farmers and encourages them to borrow more easily for agricultural needs.
3. Additional Subsidy: Farmers with a good repayment track record are rewarded with an extra 3% subsidy, incentivising responsible borrowing behaviour and encouraging timely loan repayment, which in turn lowers risk for lenders.
4. Simple Interest: Simple interest is applied when repayments are made on time, as it’s easier to calculate and more transparent. This method reduces the overall borrowing cost, benefiting both farmers and banks by promoting clarity in repayments.
5. Compound Interest: Delayed payments trigger compound interest, where interest is added to both the principal and any unpaid interest. This increases the total loan cost for farmers, encouraging them to repay on time and avoid additional financial strain.

Eligibility Criteria for Kisan Credit Card Loan Scheme

The eligibility criteria for the KCC scheme are as follows:

1. Age: Individuals between 18 and 75 years are eligible for the KCC scheme, ensuring access for farmers across various age groups.
2. Land Ownership: Farmers must own land for agricultural use to qualify for the scheme, ensuring the credit is directed towards active farming.
3. Savings Account: A savings bank account is required for smooth fund disbursement and transaction processing.
4. Rented Land: Farmers without owned land must have rented land for cultivation, proving their engagement in agricultural activities.
5. Crop Plan: A clear and structured crop production plan is needed to ensure the credit is used for productive agricultural purposes.
6. Fertile Land: Only farmers with fertile land are eligible, ensuring the credit contributes to high-yield farming activities.
7. Co-borrower for Seniors: Senior citizens (above 60) must have a co-borrower to provide additional financial security and support for repayment.

Types of Eligible Individuals:

1. Individual or joint cultivators who are owner cultivators.
2. Tenant farmers, oral lessees, and sharecroppers, demonstrating inclusivity towards various types of agricultural land tenure.
3. Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers, including tenant farmers and sharecroppers, promoting collective agricultural initiatives and community development.

Eligible beneficiaries under this scheme under fisheries and animal husbandry are:

1. Inland Fisheries and Aquaculture: Fishers, fish farmers, SHGs, JLGs, and women's organisations. You must own or lease any fisheries-related business in order to qualify as a beneficiary. This involves, among other things, owning or renting a pond, an open water body, a tank, or a hatchery.
2. Marine Fisheries: You possess a registered boat or other fishing craft and possess the required permits or licences for estuary or ocean fishing.
3. Poultry: Individual farmers or joint borrowers, SHGs, JLGs, and tenant farmers of sheep, rabbits, goats, pigs, birds, poultry, and have sheds they have owned, rented, or leased.
4. Dairy: Farmers, dairy farmers, SHGs, JLGs, and tenant farmers who own, lease, or rent sheds.

Documents Required to Apply for KCC Loan Scheme

The following are documents required to apply for KCC loan scheme:

1. Application Form: A completed form is required to initiate the loan process, detailing the applicant’s information and agricultural activities.
2. Passport Size Photographs: Two photographs are needed for identification and documentation.
3. Identification Proof: Valid government-issued IDs (e.g., Aadhar Card, Driving License, Voter ID, Passport) are needed to verify identity.
4. Address Proof: Documents such as Aadhar Card or Driving License are required to confirm the applicant’s residential address.
5. Proof of Landholding: Certified evidence of landownership or possession, verified by revenue authorities, is essential.
6. Cropping Pattern: Details of the crops grown and acreage help assess agricultural activities and credit needs.
7. Security Documents: For loan amounts exceeding Rs.1.60 lakhs or Rs.3 lakhs, collateral documents are required to secure the loan.
8. Additional Documents: Any additional documents may be requested by the lender for complete credit assessment.

How to Apply for Kisan Credit Card

The application process for the Kisan credit card can be done online, as well as, offline.

Online Process

To apply for the Kisan Credit Card scheme through the bank's website, follow these steps:

1. Step 1: Visit the official website of the bank where you wish to apply for the Kisan Credit Card.
2. Step 2: Navigate to the menu and select 'Kisan Credit Card' from the list of services.
3. Step 3: Click on 'Apply' to access the application form.
4. Step 4: Fill in all required details, including personal information, landholding details, and documents.
5. Step 5: Review the form to ensure accuracy.
6. Step 6: Submit the application.
7. Step 7: Receive an application reference number.
8. Step 8: If eligible, the bank will contact you within 3-4 working days for verification and approval.

Offline Process

For offline applications, you have two options:

Visit the Bank Branch

Here are the steps for applying for the Kisan Credit Card scheme by visiting the bank branch:

1. Step 1: Select a convenient bank branch that offers the Kisan Credit Card scheme.
2. Step 2: Visit the branch during working hours; it is best to call ahead and confirm the timings to avoid inconvenience.
3. Step 3: Upon arrival, approach a bank representative or customer service desk and inform them of your intention to apply for the Kisan Credit Card.
4. Step 4: Request assistance with the application process. The representative will provide you with the necessary forms and details on required documents.
5. Step 5: Complete the application form with accurate personal and landholding details.
6. Step 6: Submit the completed application along with documents such as identity proof, address proof, and landholding proof.
7. Step 7: Before submitting, carefully review all the information for accuracy.
8. Step 8: The bank will process your application and may provide a reference number for tracking.
9. Step 9: Follow up within the specified time to check the status of your application and to ensure all requirements are met.

Download Application Form

Here is a step-by-step guide for applying for the Kisan Credit Card scheme by downloading the application form from the bank's website:

1. Step 1: Visit the official website of the bank where you want to apply for the Kisan Credit Card.
2. Step 2: Navigate to the Kisan Credit Card section and look for the download link for the application form.
3. Step 3: Click the link to download the correct Kisan Credit Card application form.
4. Step 4: Print the form on A4-size paper.
5. Step 5: Fill out the printed form with accurate details, including personal information, contact details, and landholding details.
6. Step 6: Collect all required documents, such as identification proof, address proof, and landholding evidence, as specified by the bank.
7. Step 7: Visit the nearest bank branch during operating hours.
8. Step 8: Submit the filled application form and documents to a bank representative and inform them you're applying for the Kisan Credit Card.
9. Step 9: Confirm that the bank has received your application. You may be provided with a reference number for tracking. Follow up with the bank within the given timeframe to check your application's status.

Integration with PM-KISAN Scheme

The scheme, PM-KISAN, allows for the disbursement of Rs 6,000 per year to specified farmers in 3 instalments, and these payments can be used for their farms, and households. The scheme was integrated with Kisan Credit Card (KCC) program in 2020. The scheme also complements the KCC program, as farmers can access institutional credit more easily through the KCC program which combines the immediate income support as in PM-KISAN, and available loans at low interest rates for agricultural and allied sector activities. 

The benefits of having the supervisor (also the Executive Member) for banks, after saving the PM-KACH benefits and KCC in accordance with the recommendation from the Department of Financial Services were: 

1. Extension of the tenure of the KCC loans - 12 months to 48 months as a result we more flexible in repayment. 

1. Additional loan facility is available, even with existing pending dues, but commitment to the loan condemning interest payments terms are ongoing. 

1. Three-level consultations between banks Agri-Staff led by the Department of Financial Services, regarding credit flow and discussing sectoral issues between KCC banks. 

1. Digital banking, education credits and MSME credit were discussed at the other extensive agenda point interbank state meetings and remain important.

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

If you want to apply for a KCC Loan Scheme under the PM Kisan Samman Nidhi Scheme, you can follow these steps:

1. You must fill in a one-page form available on the website of all commercial banks.
2. You should fill in all your basic information like crop sown and land record.
3. You have to submit this form to the Common Service Centers (CSC) and they will transfer the forms to all banks.

Top Kisan Credit Cards by Banks

Additional local banks providing Kisan Credit Card loans include Odisha Gramya Bank and Bangiya Gramin Vikash Bank.

How to Check Kisan Credit Card Balance

The following are the steps to check the Kisan Credit Card balance:

1. Any bank that offers KCC allows you to apply for KCC
2. You can contact the customer care service to check the balance
3. You can also visit the bank’s website to check the balance

What is e-Kisan Credit Card (e-KCC)?

Here are the details related to Electronic KCC: 

1. Digital version of the traditional Kisan Credit Card (KCC) 
2. Initiative if Government of India to promote digitisation 
3. Eliminates the need for physical documentation and paperwork 
4. Offers credit facilities digitally 
5. Linked to the farmer’s Aadhar card 
6. Enables farmers to apply and track credit facilities online 
7. Offers short-term credit for agricultural activities that includes consumption needs, working capital requirements, post-harvest expenses, and cultivation 

1. Integrated with various government schemes and subsidies related to agriculture 
2. Offers financial incentives and support programs 
3. Streamlines the credit delivery process 
4. Empower farmers with digital tools to manage their credit requirements effectively and enhance financial inclusion

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