Agri Books

About Kisan Credit Card Scheme

The Kisan Credit Card scheme / KCC Scheme was introduced by NDA Government in August 1998 with the aim to provide adequate and timely short-term credit needs of farmers during the cropping season.

It was first proposed in the Budget 1998-99 by then Finance Minister Yashwant Sinha. Consequent to this, NABARD prepared a Model Kisan Credit Card Scheme in consultation with the Major Banks on the basis of the R V Gupta Committee.

Hypothecation of crop limits up to 1.6 lacks no need third-party guarantee.

Hypothecation of crop and simple mortgage of Agri. The land above 1.6 lacks.

Upto Rs 3.00 Lkahs→ 7% (An additional incentive of 3 percent is being given to farmers for prompt repayment of loans within the due date, making the effective interest rate 4 %)

3.00 to Rs 5.00 Lakhs→7.5%

Rs 5.00 to Rs10.00 Lakhs→ 9%

Rs 10.00 Lakhs to Rs 25.00 lakhs→11%

Security, margin, rate of interest, etc. as per RBI norms. RBI has decided to raise the limit for collateral-free agriculture loans from Rs. 1 lakh to Rs. 1.6 lakh.

Implementing Agencies:

• Commercial Banks
• Regional Rural Banks (RRBs)
• Small Finance Banks
• Cooperatives

Objective/Purpose of KCC Scheme:

To meet the short-term credit requirements for the cultivation of crops.

Post-harvest expenses.

Produce marketing loan

Consumption requirements of farmer households.

Working capital for maintenance of farm assets and activities allied to agriculture.

Investment credit requirement for agriculture and allied activities.

Eligibility for KCC Scheme

• Farmers – individual/joint borrowers who are owner cultivators;
• Tenant farmers, oral lessees & sharecroppers
• Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant farmers, sharecroppers, etc.

Fixation of credit limit / Loan Amount

• Time Period:- 12 Month
• Minimum age- 18 years
• Subvention or subsidy- 3 Lakh
• KCC Validity- 5% (10% Increment every year)
• NPA- (Non-Performing Assets):- 36 Months

The Kisan Credit Card also provides personal accident insurance that farmers can opt for. Under the insurance, they will get coverage of up to Rs.50,000 in the event of death while Rs.25,000 in the event of an accident resulting in disability.

Electronic Kisan Credit Cards

All new KCC must be issued as smart cards cum debit cards as laid down in Part II of the Annex. Further, at the time of renewal of existing KCC; farmers must be issued smart cards cum debit cards.

The short-term credit limit and the term loan limit are two distinct components of the aggregate KCC limit bearing different rates of interest and repayment periods. Until a composite card could be issued with appropriate software to separate account transactions in the sub-limits, two separate electronic cards may be issued for all new/renewed cards.