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Kisan Credit Card (KCC)
Introduction
When: The Kisan Credit Card (KCC) scheme was introduced in 1998
Why: The Kisan Credit Card Scheme aims to provide timely and adequate credit to farmers to meet their needs at the time of crop production (cultivation expenses) and meeting contingency expenses. It also covers expenses related to ancillary activities through simplified procedures in obtaining loans as and when needed.
Expansion to allied and non-farm activities: The scheme was further extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004.
Who can issue Kisan Credit Card: Commercial Banks, RRBs, Small Finance Banks and Cooperatives.
Purpose of Kisan Credit Card Scheme:
- To meet the short term credit requirements for cultivation of crops (short-term credit limit
portion) - Post-harvest expenses; (short-term credit limit portion)
- Produce marketing loan; (short-term credit limit portion)
- Consumption requirements of farmer household; (short-term credit limit portion)
- Working capital for maintenance of farm assets and activities allied to agriculture; (short-term credit limit portion)
- Investment credit requirement for agriculture and allied activities. (long term credit limit portion)
Features of KCC
- KCC borrowers shall be issued an ATM-cum -Debit card to enable them to withdraw money from KCC accounts through ATMs and make payments through PoS terminals.
- The KCC will be in the nature of a revolving account. Credit balance in the account, if any, will fetch interest at the savings bank rate.
Eligibility:
Who can avail the Kisan Credit Card Scheme
- Farmers – individual/joint borrowers who are owner cultivators;
- Tenant farmers, oral lessees & share croppers;
- Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant farmers, share croppers etc.
Household consumption limit: While 10 per cent of the short-term limit under KCC can be used for household consumption purposes, it is advisable not to divert more funds for consumption expenditure.
Issue of Electronic Kisan Credit Cards: In the year 2012, a working group under the chairmanship of Shri T. M. Bhasin, CMD, Indian Bank advised for the issue of Electronic Kisan Credit Cards. All new KCC must be issued as smart card cum debit card.
Recent updates about Kisan Credit Card (KCC) Scheme
Center directs banks to issue Kisan Credit Cards within 2 weeks of submitting application
Source: Reserve Bank of India