KISAN CREDIT CARD SCHEME

KISAN CREDIT CARD SCHEME

The Kisaan Credit Card scheme is a credit scheme introduced in August 1998 by Indian public sector banks. This model scheme was prepared by the National Bank for Agriculture and Rural Development on the recommendations of the R. V. Gupta Committee to provide advances for agricultural needs.

The Reserve Bank of India has issued Master Circular on Kisan Credit Card Scheme vide circular FIDD.CO.FSD.BC.No.6/05.05.010/2018-19 dated July 04,2018. The scheme aims at providing adequate and timely credit support from the banking system under a single window with flexibility. 

The simplified procedures to the 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. for their cultivation and other needs as indicated below:

1.  To meet the short term credit requirements for cultivation of crops;
2.  Post-harvest expenses;
3.  Produce marketing loan;
4.  Consumption requirements of farmer household;
5. Working capital for maintenance of farm assets and activities allied to
6. agriculture;
7. Investment credit requirement for agriculture and allied activities. 

Further, Reserve Bank of India vide circular FIDD.CO.FSD. BC.12/05.05.010/2018-19 dated February 04, 2019, has extended the KCC facility to farmers engaged in Animal Husbandry and Fisheries for their working capital requirements.

The government of India is also implementing an Interest Subvention Scheme under which interest subvention (IS) of 2% and Prompt Repayment Incentive (PRI) of 3% is given to farmers on Short Term Agri Loan up to 3 lakh which makes the effective rate of interest on such loans at 4%.

The following steps have been taken to bring the maximum number of farmers under KCC in order to provide easy access to concessional institutional credit and simplify the process to avail KCC:-

All the charges including processing fee, inspection, ledger folio charges, service charges for loans up to Rs.3.00 lakh were waived off.

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• Collateral free loan limit for short-term agri-credit has been raised from Rs.1.00 lakh to Rs.1.60 lakh by RBI.
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• State Governments have been advised to hold bank-wise and village-wise camps to collect KCC application forms from eligible farmers and the applications collected therein are to be submitted to the Bank’s branch.
• KCC is to be issued within 14 days from the receipt of a completed application. A simple one-page special application form was also designed and shared with banks. The KCC has been extended to the farmers doing allied activities including Animal Husbandry, dairying, and fisheries. 

From February 2020 Government of India is running the KCC Saturation drive in collaboration with DFS and other stakeholders in order to increase coverage under Kisan Credit Card Scheme. As a result, 2.92 crores KCC has been issued with a sanctioned credit limit of Rs. 3.20 lakh crore as of 25th February 2022.

The Government of India also implements the Interest Subvention Scheme with a view to providing short-term Agri-loans to the farmers at a concessional rate of interest. Under the scheme, short-term crop loans up to Rs. 3.00 lakh is available to farmers engaged in Agriculture and other allied activities at a benchmark rate of 9%. 

The government of India provides a 2% Interest Subvention on the benchmark rate. An additional 3% subvention is also given to the farmers for prompt and timely repayment of loans; thus the effective rate of interest comes down to 4% per annum.

This information was given by the Union Minister of Agriculture and Farmers Welfare Shri Narendra Singh Tomar in a written reply in Lok Sabha today.