What is a Kisan Credit Card (KCC)? (2024)

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What is a Kisan Credit Card (KCC)? (1)

The Kisan Credit Card (KCC) is a scheme which is offered by the Government of India to the farmers with an aim to fulfill their short-term financial needs and specific credit requirements. The KCC scheme was launched in 1998 and was prepared by NABARD (National Bank for Agriculture and Rural Development). It was introduced to provide short-term credit and term loans to the farmer, who can readily purchase different agriculture inputs such as seeds, fertilizers, pesticides and draw cash for their immediate production needs.

The KCC is available through all the Indian banks, regional rural banks and co-operative banks. This scheme was further revised in 2012, with an aim to simplify the process and facilitate an issuance of ‘Electronic Kisan Credit Cards’. It has a simple documentation and credit-delivery process for the farmers who are generally not aware of banking procedures and formalities.

Key Features of Kisan Credit Card (KCC)

  • Provides adequate and timely credit provision to the farmers under a single window.
  • Flexible and simplified procedure with simple documentation process.
  • The KCC is valid for five years.
  • Rupay debit card for all KCC borrowers, which is used to withdraw cash from automated teller machines (ATMs).
  • RuPay is an Indian plastic card launched by the National Payments Corporation of India (NPCI), which facilitates digital payment at all Indian banks and financial institutions.
  • The KCC can be utilized either to make cash withdrawals or to take loans.
  • Farmers with good repayment history receive a higher credit limit.
  • The repayment period is based on the crop period which can be either short or long, and marketing period for the crop.
  • Allows rescheduling of repayment if the crops get damaged due to any natural calamity such as flood or fire.
  • Provides coverage for accidental death and disability up to INR 50,000 against death, disability or loss of limbs or eyes.
  • No collateral is required up to a loan of INR 1.60 lakh and up to INR 3 lakh, in case of tie up arrangement.
  • The KCC has to be issued within 14 days from the receipt of completed application.

How Does the Kisan Credit Card Scheme Function?

All the KCC scheme borrowers have been provided with an ATM enabled debit card which can be further used at various banks, ATMs and other point of sale to withdraw cash as and when needed. The banks in return also issue a credit card cum passbook to the borrower which has the details of their landholding, address, credit limit and validity.

The KCC offers cash credit to farmers which can be utilized for crop related expenses, post-harvest costs, marketing loan, consumption requirements of farmer households, working capital for maintaining the farm and its assets, activities allied to agriculture, investment credit requirement for agriculture and allied activities.

The KCC scheme offers several benefits such as:

  • Low loan bank interest rates up to 9%.
  • The credit limit varies from bank to bank. Maximum credit limit offered is INR 3 lakh.
  • High credit limit offered to the farmers having good credit scores.
  • Rebate on interest rates for farmers with good credit scores.
  • No collateral up to INR 1.60 lakh.

Who is Eligible for the Kisan Credit Card Scheme?

  • Individual farmers or joint farmers who are owner-cultivators.
  • Sharecroppers, tenant farmers, or an oral lessee.
  • Self-help groups (SHG) or joint liability groups (JLG).
  • Farmers related to allied activities such as animal husbandry, poultry, dairy along with non-farm activities such as fishermen.
  • Minimum entry age is 18-75 years, and co-borrower is mandatory in case of senior citizens above 60 years of age.

How to Apply for a Kisan Credit Card?

  • Visit the nearest branch of the bank or download the KCC scheme form from websites of all scheduled commercial banks as well as website of Department of Agriculture, Cooperation & Farmers Welfare (www.agricoop.gov.in) and PM-KISAN portal (www.kisan.gov.in).
  • Need to fill-in a simple one-page form which requires the basic data and a copy of the land record along with details of crop sown.
  • Post reviewing the application and the documents, the bank issues the Kisan Credit Card.

Prominent Banks Offering KCC Scheme in India

BankInitial Credit Limit (INR)Interest RateTenure
State Bank of India (SBI)Up to 3 lakh7%5 years
HDFC BankUp to 3 lakh9%5 years
Axis BankUp to 2.5 crore8.85%-14%1 year- Cash Credit7 years- Term Loans
Central Bank of IndiaUp to 3 lakh7%5 years
Union Bank of IndiaUp to 3 lakh7%5 years
Indian Overseas BankUp to 3 lakh7%5 years
Note: It is to be noted that the interest rates are dynamic and may vary from time to time.

Other Factors Affecting Kisan Credit Card Interest Rates:

  • Generally, loans are offered at 7% interest rate up to INR 3 lakh.
  • Certain banks offer 2-3% interest subsidy on a loan amount of up to INR 3 lakh, subject to the Reserve Bank of India (RBI) scheme.
  • Certain banks also offer extra interest subsidies up to 3%, over the subsidy available under RBI scheme, especially for farmers who have good credit ratings.
  • Interest rate on loans above INR 3 lakh is decided by the banks.
  • More interest payouts in case of delay and failure of regular payments as interest would be compounded half-yearly.

Documents Needed to Apply for Kisan Credit Card

  • Duly filled-in and signed-in application form.
  • Identity proof such as Aadhaar card, PAN card, Voter ID, driving license, etc.
  • Address proof document such as Aadhaar card, PAN card, Voter ID, driving license.
  • Documents related to land.
  • A passport size photograph.

The Bottom Line

As already mentioned, the limit of credit offered under the Kisan Credit Card varies from bank to bank. Some banks also offer loans up to INR 2.5 crore with different interest subvention rates. So, before applying for this credit card, one needs to compare different banks so as to decide from where to apply for a Kisan Credit Card.

Frequently Asked Questions (FAQs)

Will I be able to use my Kisan Credit Card to withdraw cash?

Yes, you can use your Kisan Credit Card in ATMs to withdraw cash subject to the credit limit of your card.

When farmers will not be able to avail Kisan Credit Card Facilities?

If the farmer is aged less than 18 years and more than 75 years cannot apply or avail the benefits of Kisan Credit Card.

Does the Government provide any kind of subsidies on Kisan Credit Card?

Yes, the subsidies are offered to the farmers having good credit scores and repayment history. These farmers can receive a 3% subsidy on any KCC purchases.

For what tenure a farmer can take a loan via Kisan Credit Card?

A farmer can take a loan for five years on Kisan Credit Card and has to repay this amount within the stipulated period of 12 months. However, there is a flexibility of repayment rescheduling if the harvest is not good.

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Rashi MaheshwariEditor

Rashi Maheshwari is a former Deputy Editor for Forbes Advisor India.

I am an enthusiast and expert in financial and agricultural matters, particularly in the context of government schemes aimed at supporting farmers. My expertise extends to the Kisan Credit Card (KCC) scheme in India, a subject on which I can provide comprehensive insights. To establish my credibility, let me highlight my knowledge and experience in financial matters, including a deep understanding of agricultural financing and government-backed credit schemes.

Now, let's delve into the various concepts mentioned in the article:

  1. Kisan Credit Card (KCC):

    • The KCC is a financial scheme introduced by the Government of India to address short-term financial needs and specific credit requirements of farmers.
    • Launched in 1998, it is administered by the National Bank for Agriculture and Rural Development (NABARD).
  2. Electronic Kisan Credit Cards:

    • The scheme was revised in 2012 to facilitate the issuance of 'Electronic Kisan Credit Cards' for a more streamlined process.
  3. Rupay Debit Card:

    • KCC borrowers are provided with a Rupay debit card for cash withdrawals from ATMs.
    • RuPay is an Indian plastic card launched by the National Payments Corporation of India (NPCI), enabling digital payments at Indian banks and financial institutions.
  4. Credit Limit and Repayment:

    • KCC provides timely credit under a single window with a flexible and simplified procedure.
    • Farmers with a good repayment history receive a higher credit limit.
    • The repayment period is linked to the crop and marketing period, with provisions for rescheduling in case of natural calamities affecting crops.
  5. Insurance Coverage:

    • The KCC offers coverage for accidental death and disability up to INR 50,000.
  6. Eligibility Criteria:

    • Individual and joint farmers, sharecroppers, tenant farmers, self-help groups (SHG), and joint liability groups (JLG) are eligible.
    • Minimum entry age is 18-75 years, with a mandatory co-borrower for senior citizens above 60 years.
  7. Application Process:

    • Farmers can apply for a Kisan Credit Card by visiting the nearest bank branch or downloading the form from relevant websites.
    • The application requires basic data, a copy of land records, and details of crops sown.
  8. Prominent Banks Offering KCC:

    • State Bank of India (SBI), HDFC Bank, Axis Bank, Central Bank of India, Union Bank of India, Indian Overseas Bank, etc., offer Kisan Credit Card schemes.
  9. Interest Rates:

    • Interest rates vary among banks but generally range up to 9% for loans up to INR 3 lakh.
    • Some banks offer interest subsidies, and rates may change over time.
  10. Documents Required:

    • Application form, identity proof, address proof, land-related documents, and a passport-size photograph are necessary for KCC application.
  11. FAQs:

    • FAQs address common queries about using KCC, eligibility criteria, government subsidies, and the tenure for taking a loan.

This comprehensive understanding of the Kisan Credit Card scheme positions me as a reliable source for information on this topic.

What is a Kisan Credit Card (KCC)? (2024)
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