Kisan Credit Card (KCC) Scheme

The Kisan Credit Card (KCC) Scheme, introduced in 1998, has been a significant initiative in providing timely and adequate credit to farmers in India. The scheme is implemented by various agencies, including cooperative banks, regional rural banks, scheduled commercial banks and small finance banks, with the National Bank for Agriculture and Rural Development (NABARD) acting as the nodal agency. The core objective of the KCC Scheme is to address the credit requirements of farmers and support them in meeting their agricultural and allied needs.

Scheme Overview

• Scheme Name: Kisan Credit Card (KCC) Scheme
• Scheme Launch Year: 1998
• Scheme Fund Allocated: The scheme does not have a fixed allocation of funds as it depends on the financial institution providing the credit.
• Type of Scheme: Central Government of India
• Website to apply: The application process varies depending on the issuing bank or financial institution.

Features of Kisan Credit Card (KCC) Scheme

1. Loan Amount: Farmers can avail of loans of up to Rs. 3 lakhs, enabling them to meet their financial requirements.
2. Loan Repayment Period: The credit facility is available for a period of up to 3 years, allowing farmers to repay the loan over a reasonable timeframe.
3. Collateral Requirement: For loans up to Rs. 1.60 lakhs, no collateral is required, easing the burden of providing additional security.
4. Card Validity: The Kisan Credit Card is valid for 5 years, subject to an annual review to ensure continued eligibility and creditworthiness.
5. ATM-enabled RuPay Card: The KCC comes with an ATM-enabled RuPay Card, enabling farmers to access their funds conveniently.
6. Insurance Coverage: The scheme provides insurance coverage of up to Rs. 50,000 for permanent disability or death and up to Rs. 25,000 for other risks, providing a safety net for unforeseen circumstances.
7. Built-in Cost Escalation: The Kisan Credit Card incorporates a provision for built-in cost escalation, considering the inflationary impact on agricultural activities.
8. Flexible Withdrawals: Farmers can make any number of withdrawals within the prescribed credit limit, facilitating their cash flow requirements.
9. Applicable Lending Rate to Farmers: 7% Rate of Interest 
10. Additional Interest Subvention: Farmers who repay their loans on time receive an additional interest subvention of 3% per annum which means the effective rate of interest for those will be 4 %. 

Benefits

1. Covers various activities: The credit can be availed for short-term credit requirement viz, cultivation of crops, post-harvest expenses, produce marketing loans, consumption requirements of households, maintenance of farm assets and activities allied to agriculture, investment credit for agriculture and allied activities.
2. Accessibility: The scheme ensures that farmers have access to timely and adequate credit, allowing them to meet their various agricultural and allied needs.
3. No Collateral Requirement: For loans up to Rs. 1.60 lakhs, farmers are relieved from the burden of providing collateral, making credit more accessible to a wider range of farmers.
4. Financial Security: The insurance coverage provided under the scheme offers financial security to farmers and their families in the event of unforeseen circumstances.
5. Simplified Banking: The KCC comes with an ATM-enabled RuPay Card, enabling farmers to withdraw funds conveniently and perform transactions at various locations.
6. Affordable Interest Rates: With a lending rate of 7% and interest subvention to lending institutions, the KCC Scheme offers credit at affordable rates to farmers.
7. Encouragement for Timely Repayment: The additional interest subvention of 3% per annum incentivizes farmers to repay their loans on time, promoting financial discipline and reducing the burden of interest.

Drawback of the Scheme

While the Kisan Credit Card (KCC) Scheme has proven to be beneficial for a majority of farmers, it may not be as useful for those who do not engage in agricultural activities, allied activities, non-farming activities, animal husbandry, or fisheries. The scheme primarily targets individuals involved in these sectors, which may limit its applicability to certain segments of the farming community.

How to Apply?

To apply for the Kisan Credit Card (KCC) Scheme, follow these steps:

• Step 1: Visit the website or branch of the bank or financial institution offering the KCC scheme.
• Step 2: Obtain the Kisan Credit Card application form.
• Step 3: Fill in the required details accurately, providing the necessary information about your  agricultural activities and financial needs.
• Step 4: Attach the required documents, such as proof of identity, proof of address and land documents.
• Step 5: Submit the completed application form along with the documents to the bank or financial institution.
• Step 6: The bank or financial institution will process the application and issue the Kisan Credit Card within 14 days.

Documents Required 

• Proof of identity (Aadhaar card, voter ID, etc.)
• Proof of address (electricity bill, ration card, driving license, etc.)
• Land documents (ownership documents, tenancy agreement, lease agreement, etc.)
• Passport-size photographs
• Any other documents required by the bank or financial institution for the application process.

Conclusion

The Kisan Credit Card (KCC) Scheme has played a vital role in providing farmers with accessible and affordable credit to meet their agricultural and allied needs. By simplifying the credit process, offering insurance coverage and providing an ATM-enabled RuPay Card, the scheme has significantly benefited the agricultural sector and improved the financial well-being of farmers across India. While the scheme primarily targets individuals engaged in agriculture-related activities, it remains an important tool for empowering farmers and supporting their livelihoods