Kisan Credit Card: Benefits, Eligibility, Application Process

Kisan Credit Card (KCC) scheme is a very important initiative by the Government of India. This initiative is taken by the Government of India to provide timely and affordable credit support to farmers across the nation. This facility provides farmers with short-term loans for the production of crops, manages expenses after harvest and other agricultural requirements. The KCC aims to liberate farmers from the burdens of high interest levied upon them by private moneylenders.

Introduced in the year 1998, the scheme was introduced by the National Bank for Agriculture and Rural Development (NABARD). It provides a simple and flexible mechanism for meeting the credit needs of the farming community. It is also cost-effective, which ultimately increases the stability of farm income.

Kisan Credit Card (KCC) Scheme Overview

Kisan Credit Card acts as a revolving credit facility. Once the card is issued, a farmer can use it for multiple withdrawal and repayment cycles for a period of five years. The primary goal is to provide cardholders with the convenience of accessing funds quickly. It just looks like a commercial bank credit card, but its interest rates are customized for the agricultural sector. The scheme has been expanded over time to include activities and investment needs.

What is Kisan Credit Card (KCC)?

KCC is a specialized scheme that allows farmers to withdraw funds up to a credit limit. This credit is provided by Public Sector Banks, Regional Rural Banks (RRBs), and Cooperative Banks. The basic interest rate on the KCC limit is generally 7% per annum. However, a significant benefit is the Interest Subvention Scheme. It reduces the effective interest rate for farmers who repay on time.

Key Benefits of Kisan Credit Card

Holding a KCC card provides farmers with major advantages that support their financial and operational needs. Here are some major benefits which a kcc holder can have:

Low Interest Rate: Loans up to a certain limit are subsidised by the government. It brings the effective interest rate down to approximately 4% per annum for prompt payers.

Waiver of Collateral: No collateral security is required for KCC limits up to a specific threshold. Currently this threshold limit is ₹1.60 Lakh.

Flexible Repayment: Repayment is scheduled based on the harvesting and marketing period of farmer. It aligns with the seasonal income flow of agriculture.

Insurance Coverage: KCC holders are covered under the Pradhan Mantri Fasal Bima Yojana (PMFBY) for crop insurance. 

Access to Working Capital: The card offers revolving credit for buying seeds, fertilisers, and pesticides and meeting daily farm operational needs.

Kisan Credit Card Eligibility Criteria

Specific eligibility criteria have been established  to ensure the benefits of this credit card reach genuine cultivators. Applicants must be farmers, individuals or joint cultivators who are involved in agricultural activities.

• Farmers – Individual or Joint Borrowers: Individuals or joint cultivators who are owners of agricultural land.

• Tenant Farmers, Oral Lessees & Share Croppers: Even those who lease or sharecrop land for agricultural purposes are eligible.

• Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of Farmers: These groups can apply for KCC to cover the needs of their members.

• Age Limit: The applicant must be at least 18 years old and not more than 75 years old. For senior citizens, a younger legal heir is required as a co-borrower.

Documents Required for KCC Application

• A complete application for the KCC must be supported by the necessary Documents for verification by the lending institution. Here is the list of documents required to apply for KCC:

• Completed Application Form: The standardised KCC application form provided by the bank.

• Identity Proof: A copy of the Aadhaar Card, Voter ID, or Passport.

• Address Proof: A copy of the Aadhaar Card, Utility Bills, or any government-issued address document.

• Land Documents: Copies of land records, such as Patta/Khasra/Khatauni (Proof of land ownership or cultivation rights).

• Passport Size Photographs: Two recent passport-size photographs of the applicant.

• Other Documents: Bank statements or a declaration of no-dues from other banks.

How to Apply for Kisan Credit Card?

The process on how to apply for kisan credit card (Step-by-Step) has been simplified to encourage wider participation. Farmers can apply at the nearest branch of a Commercial Bank, Regional Rural Bank, or Cooperative Bank.

• Obtain the Application Form: Download the latest standardised KCC application form from the official website of the chosen bank. Also, it can be collected directly from the bank branch.

• Fill the Form: Accurately fill in all personal details, land details (area, crop cultivated, etc.), and the estimated credit requirement.

• Attach Documents: Organise all the necessary Documents Required, including ID proof, address proof, and authenticated land documents.

• Submit to Bank: Submit the completed form and all supporting documents to the relevant bank branch. Some banks also facilitate online application submission.

• Bank Verification: The bank verifies the application, documents, and land records, often including a verification of farming activity by a field officer.

• Sanction and Issue: Upon successful verification, the bank sanctions the credit limit and issues the Card, which can be used via a RuPay Card, a passbook, or electronic channels.

State-wise Guidelines and Key Implementing Institutions

The core structure of the card scheme is uniform across the country. Also, there can be minor State-wise Guidelines and variations in implementation. These variations are often related to the calculation of the Scale of Finance—the per-acre loan amount for a specific crop—which is determined at the District Level Technical Committee (DLTC) based on local costs and practices.

Key Implementing Institutions for KCC include Commercial Public and Private Sector Banks. Major banks include State Bank of India, Punjab National Bank, Bank of Baroda, etc. Regional Rural Banks (RRBs) inclide Financial institutions operating regionally, specifically focused on rural credit. Cooperative Banks include State Cooperative Banks (SCBs), District Central Cooperative Banks (DCCBs), and Primary Agricultural Credit Societies (PACS).

Kisan Credit Card Features and Advantages

KCC is more than just a loan. It is an important financial instrument designed for the unique requirements of agriculture, offering stability and ease of operation. Here are major features and advantages of KCC: