Kisan Credit Cards: All You Need to Know

What is a Kisan credit card?

  • Kisan Credit Card is offered to farmers in India in order to enable them to access affordable credit. Reserve Bank of India (RBI), along with National Bank for Agriculture and Rural Development (NABARD) initiated the conception of Kisan Credit Cards (KCC) in 1998-99, in order to assist agriculturists to have easily accessible cash credit facilities.
  • Kisan Credit Card facility was proposed by the Finance Minister Shri Yashwant Sinha in the FY1998-99 Budget, with the objective of providing accessible short-term credit to farmers to meet their immediate credit requirements during the crop seasons.
  • Reserve Bank of India (RBI), with National Bank for Agriculture and Rural Development (NABARD), shouldered the responsibility and initiated the Kisan Credit Cards in India.

Why Kisan Credit Cards?

  • To provide timely credit facility to support agriculture and allied activities.
  • To eliminate unregulated credit by money lenders.
  • To boost nation's Agribusiness environment and productivity to international standards.

How do Kisan Credit Cards work?

  • Based on the land holdings and the income earned from the cultivation in it, banks issue farmers Kisan Credit Cards. 
  • The card holder/ farmer should have a good credit history to be eligible for the KCC. 
  • The Card holders get facilities like passbook, particulars of land holding, address, validity period, credit limit, etc., which acts as the customer’s unique identification and as a system for tracking transactions.
  • Kisan credit cards can be used at outlets, as well as to withdraw cash to make the necessary purchases for agriculture.

Interest and other charges on Kisan Credit Cards:

  • Kisan Credit Card interest rates, as well as credit limits, varies from bank to bank. Generally, the applicable interest rate per annum for Kisan Credit Cards is 9%, for a maximum Rs. 3 Lakh as a credit limit. 
  • The Central government subsidies on interest rate applicable to the financing institutions, provided that the cardholder’s credit history is good. 
  • The additional interest subsidy of 2% is provided and if the customer has a soundtrack record for 3 years, She/he is eligible for an increased credit limit.
  • Other charges and fees involved in taking credit under KCC scheme are insurance premium, processing fees, charges on land mortgage deed, etc.

Benefits of Kisan Credit Cards:

  • Time and cost-efficient scheme. 
  • Comparatively lower interest rates.
  • Single term loan for all agricultural requirements.
  • Flexible repayment options.
  • Assists in the purchase of fertilisers, seeds, availing cash discounts from merchants/ dealers, etc.
  • Funds withdrawal from any of the Bank’s branches, as per the sole discretion of the bank is possible.
  • Income from agriculture and allied sources determines the maximum credit limit.
  • Repayment of the credit can be made once the harvest season in over.
  • An elaborate documentation process is not required or continuous appraisals under the Kisan Credit Card Scheme.
  • Cash withdrawal using the Kisan credit card requires very little paperwork, it is simple and hassle-free for both ( the card holder and bank). 
  • Some other advantages include no transaction costs, lesser risks in loan recovery, etc.


Top Banks Providing Kisan Credit Card in India:


NABARD:

NABARD offers term loans and easily accessible credit to farmers to meet their basic agricultural expenses.

State bank of India:

Short-term credit is offered to farmers, for the purpose of meeting the credit requirements for production, expenses related to agriculture allied activities, as well as contingency reserves and expenses.

Bank of India:

The Bank provides financial support to farmers in order to meet the expenses involved in cultivation and other Agri-allied activities, at a comparatively lower cost.

IDBI

IDBI offers Kisan Credit Cards to farmers along with additional features like crop loans, investment credit and working capital for meeting agricultural expenses. 

National Payments Corporation of India (NPCI) and KCC

RuPay Kisan credit cards are to be offered by National Payments Corporation of India (NPCI), as a part of its domestic card scheme for multilateral payments in RuPay platform.
Under PMJDY( Jan Dhan Yojana), debit cards are offered in RUPAY platform.

Insurance under Kisan Credit Card Scheme:

A personal accident insurance cover for farmers who have a Kisan Credit Card, as soon as the customer avails the scheme is provided. The individual gets a personal accident cover of Rs. 50,000 in the event of deceased(death), and Rs. 25,000 in the case of disability.
In order to avail this insurance cover, the customer should not be above the age of 70 years at the time of availing the Kisan Credit Card

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