Kisan Credit Card (KCC) Scheme
- The Kisan Credit Card (KCC) scheme was introduced in August 1998
- Eligibility: Minimum age: 18 years
- Issuance of Kisan Credit Cards to farmers on the basis of their holdings for uniform adoption by the banks so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs.
- The scheme was further extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004.
- Objective / Purpose:
- To meet the short term credit requirements for cultivation of crops;
- Post-harvest expenses;
- Produce marketing loan;
- Consumption requirements of farmer household;
- Working capital for maintenance of farm assets and activities allied to agriculture;
- Investment credit requirement for agriculture and allied activities.
Eligibility
- 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.
- Card valid for 3-5 years subject to annual review. As incentive for good performance, credit limits could be enhanced to take care of increase in costs, change in cropping pattern, etc.
- Each drawl to be repaid within a maximum period of 12 months.
- Security, margin, rate of interest, etc. as per RBI norms. RBI has decided to raise the limit for collateral-free agriculture loans from Rs. 1 lakh to Rs. 1.6 lakh.
- The Kisan Credit Card also provides personal accident insurance that farmers can opt for. Under the insurance, they will get coverage of up to Rs.50,000 in the event of death while Rs.25,000 in the event of an accident resulting in disability.
- KCC is to be issued within 14 days from the receipt of completed application.
- Crop loans disbursed under KCC Scheme for notified crops are covered under Crop Insurance Scheme, to protect the interest of the farmer against loss of crop yield caused by natural calamities, pest attacks etc.
- RuPayKisan Credit Card: RuPay is an Indian domestic card scheme conceived and launched by the National Payments Corporation of India (NPCI).
- RuPay facilitates electronic payment at all Indian banks and financial institutions and competes with Master Card and Visa in India. NPCI started Rupay card in 2012.
- NABARD, in January 2013 set up Special Project Unit- Kisan Credit Card (SPU-KCC) with a mandate for encouraging cooperative banks and Regional Rural Banks across the country to issue Rupay KCC debit cards.
- The farmers get the short-term crop loans up to Rs. 3 lakhs at reduced rate of interest at 7%. If the farmers deposit the loan amount on the due date; they get another 3% rebate in the interest rate. So, the effective rate of interest would be only 4%.
- The facility of Kisan Credit Cards has been extended to fisheries and animal husbandry (including poultry) farmers (in 2018-19 budget) to help them meet their working capital needs.
- According to an announcement made on 26 August 2019, the Reserve Bank of India (RBI) will be providing a 2% subsidy on the rate of interest for any short-term loans of Rs.2 lakh that have been availed by farmers who are engaged in animal husbandry and fisheries via the Kisan Credit Card (KCC).
- Famers will be able to avail loans of up to Rs.2 lakh with a concessional interest rate of 7%. The reduction of interest will be applicable for all loans that have been availed during 2018-2019 and 2019-2020. An extra 3% discount on the interest rate will be provided to farmers who have been promptly paying their loans.
- Number of KCC issued: Uttar Pradesh
- Documents required to get KCC:
- Duly filled application form
- Identity proof- Voter ID card/PAN card/Passport/ Aadhaar card,/Driving License etc.
- Address proof: Voter ID card/Passport/Aadhaar card/Driving license etc.
Pashu Kisan Credit Card:
- Launched: 6 December 2019 in Haryana
- For any person who has cattle or freshwater shrimp more than a value of Rs.1.6 lakh, collateral will need to be given to the bank.
- According to the government, an owner can purchase anything and everything with the credit limit. However, he or she must repay the amount within 1 year to get an interest rate of 4%. The interest rate increases, and they become defaulters if the money is not repaid within a year.
Practice Questions:
1. How much is the interest rate of KCC? (AFO-2018)
a. 5 % b. 3% c. 4% d. 7% e. 2 %
2. Which of the following categories of bank does not offer Kisaan credit card scheme? (RRB SO-2018)
a. RRB b. Scheduled Cooperative Bank c. Payment Bank d. Public sector bank e. None of these
3. In terms of interest subvention scheme for KCC to fishery and animals husbandry, interest subvention of 2 % per annum provide short term loan upto? (NABARD 2021)
(a) 1 Lakh
(b) 3 Lakh
(c) 2 lakh
(d) 5 Lakh
(e) 7 Lakh
4. 20. The Union Minister of Finance ,in his 1998-99 budget speech on August 1998 Introduced the “Kisan credit card ” scheme by the recommendation of which committee .
(a) CRAFICARD Committee
(b) Mohan Singh Mehta Committee
(c) RV Gupta Committee
(d) Balwant Rai Mehta Committee
(e) Sen committee.
5. For which purpose a kisan credit card can not be provided?
a. Short term credit requirements for cultivation
b. Post-harvest expenses
c. Produce marketing loan
d. Investment credit requirement for agriculture
e. None of these