Kisan Credit Card Scheme 2023: The Kisan Credit Card KCC scheme was introduced with the objective of providing adequate and timely credit to the farmers for their agricultural operations. The Government of India provides farmers with an interest subvention of 2% and a prompt repayment incentive of 3%, thus making finance available at a highly subsidized rate of 4% per annum.
This scheme was further expanded to meet the investment requirement of the farmers. allied and non-farm activities in the year 2004 and again reviewed in 2012 by a working group under the chairmanship of Shri TM Bhasin, CMD, Indian Bank with the objective of simplifying the scheme and facilitating the electronic Kisan Credit Card. This scheme provides comprehensive guidelines to the banks for the operation of the KCC scheme. Implementing banks will have the discretion to adapt the same as per institution / location-specific requirements.
Objectives / Objectives of Kisan Credit Card
The objective of Kisan Credit Card Yojana is to provide adequate and timely credit support to farmers from the banking system under a single window for their agricultural and other requirements with friendly and simple procedures as mentioned below:
- To meet the needs of short term sustainability for crop cultivation;
- post harvesting cost;
- produce marketing loans;
- consumption needs of the farming household;
- Need for investment support for agriculture and allied activities
KCC Card Type
- Magnetic stripe card with PIN (Personal Identification Number) with ISO IIN (International Standards Organization International Identification Number) to enable access to all bank ATMs and micro ATMs
- In case banks want to use the centralized biometric authentication infrastructure of UIDAI (Aadhaar Authentication), magnetic stripe debit card and PIN with ISO IIN can be provided along with biometric authentication of UIDAI.
- Debit cards with magnetic stripes and only biometric authentication can also be provided depending on the customer base of the bank. Till then, UIDAI becomes widespread, banks can do so if they want to start using their existing centralized biometric infrastructure without interoperability.
- Banks can choose to provide EMV (Europay, MasterCard and VISA, the global standard for the interoperability of integrated circuit cards) and RUPAY compatible chip cards with magnetic stripe and PIN with ISO IIN.
- In addition, biometric authentication and smart cards may follow common open standards set by IDRBT and IBA. This will enable them to make integrated transactions with the input dealers and also enable them to credit their accounts when they sell their produce at mandis, procurement centers etc.
Kisan Credit Card Scheme 2023
The following delivery channels will be put in place for the Kisan Credit Card to be used by farmers to effectively transact in their KCC account.
- Withdrawal through ATM / Micro ATM
- Withdrawal through BC using smart card.
- PoS Machine by Input Dealers
- Mobile Banking with IMPS Capabilities / IVR
- Aadhaar Enabled Cards
Benefits of Kisan Credit Card
Fixation of credit limit/loan amount
- Short term limit to come for the first year: For farmers growing only one crop in a year: Financial scale for crops (as decided by the District Level Technical Committee) x Limit of area under cultivation 10% Subsequent limit Cropping/household/use requirements Repair of farm assets and 20% of the limit for maintenance cost, Pak Insurance, PAIS and Property Insurance.
- Limit for 2nd and subsequent year: The limit for the first year for the purposes of crop cultivation is increased by 10% of the increase in expenditure/increase in scale for each subsequent year (2nd, 3rd, 4th and 5th year) plus the estimated term loan for the tenure of the Kisan Credit Card. component, ie, five years.
- For farmers growing more than one crop in a year, for the first year the limit will have to be fixed on the basis of crops grown according to the prescribed cropping pattern and 10% of the limit for increase/increase in cost. Finance for each subsequent year (2nd, 3rd, 4th and 5th year). It is believed that for the remaining four years also the farmers follow the same method of cultivation. If the method of cultivation adopted by the farmer changes in the subsequent year, the limit can be worked out again.
- Term loan for investments towards land development, minor irrigation, purchase of farm equipment and allied agricultural activities. Banks may fix loan amount for loan and working capital limits for agriculture and allied activities etc. based on the unit price of the property/s proposed to be taken up by the farmer, allied activities already being undertaken. Bank’s judgment regarding repayment capacity in comparison to the total loan burden falling on the farmer including farm, existing loan obligations.
- The long term loan limit is based on the bank’s perception of the proposed investments and the repaying capacity of the farmer over a period of five years.
- Maximum Permissible Limit: The short term loan limit for the 5th year is the same plus the estimated long term loan requirement will be the Maximum Permissible Limit (MPL) and will be treated as Kisan Credit Card limit.
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Fixing sub-limits for farmers other than marginal:
- The interest rates that apply to term loans and short-term loans are distinct. Short-term Pakistani loans are also currently covered by the Interest Subvention Scheme and the Prompt Repayment Incentive Scheme. Short-term and long-term loans have distinct repayment schedules and standards. As a result, the card limit will be divided into separate sublimits for the term loan and short-term cash credit limit for the sake of both operational and accounting convenience.
- For short-term cash credit, the method of cropping should determine the drawing limit, and the farmer should be able to choose how much can be drawn for crop production, farm asset use, and maintenance. A revised stretchable limit can be set, and the farmer is informed of it, if the improvement in the standard of finance for any year by the district-level committee exceeds the 10% conceptual increase that was considered when setting the limit of five years. The farmer should be informed if the card’s limit needs to be increased for such renewals (the fourth or fifth year). Drawals may be permitted for term loans based on the repayment schedule determined based on the nature of the investment and the proposed investments’ economic life. is to make sure that banks can take suitable collateral in accordance with their policy whenever the card’s limit or liability calls for additional security.
Kisan Credit Card Eligibility
Farmers – individual/joint borrowers who are owner cultivators;
tenant farmers, oral hirers and sharecroppers;
Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers consisting of tenant farmers, share croppers etc.
Kisan Credit Card Application Process:
- If you want to apply for a Kisan Credit Card Scheme, go to the bank’s website.
- Select the Kisan Credit Card option from the list.
- The website will take you to the application page when you click the “Apply” option.
- Click “Submit” after entering the required information into the form.
- The application reference number will be sent in this manner. The bank will get in touch with you within three to four business days to discuss further processing if you are eligible.
Required Documents for KCC
- application letter.
- Two passport size photographs.
- ID Proof like Driving License/Aadhaar Card/Voter ID Card/Passport.
- Address evidence such as an Aadhar Card or driving license
- a legitimately certified record of land ownership from the revenue authorities.
- Planting pattern (crops grown).
- Rs. 1.60 Lakh / Rs. Security documents for loan limits above Rs.3.00 lakh, as applicable.
- Any other document as permitted.
Important Links
- Official website: Click Here