Kisan Credit Card Scheme: Eligibility, Objectives and Features
The Kisan Credit Card (KCC) scheme was introduced in 1998-99 to fulfil the financial requirements of the farmers at various stages of farming through institutional credit.
As a result, the model scheme was prepared by National Bank for Agriculture and Rural Development (NABARD) on the recommendation of R.V Gupta committee.
Who is eligible to get the benefits of the Kisan Credit Card (KCC) Scheme;
1. The Small farmers
2. The Marginal farmers
3. Share croppers
4. Lessee and tenant farmers
5. The Self Help Groups (SHGs) or Joint Liability Groups (JLGs)
In case of credit limit above Rs. 1 lakh, beneficiary has to pledge the crops or pledge his land as mortgage. However, collateral security may be obtained at the discretion of bank in some cases.
Kisan Credit Card is valid for 5 years subject to annual review and performance of the borrower.
Objectives of the Kisan Credit Card (KCC) Scheme;
Before the launch of the Kisan Credit Card Scheme; a large number of farmers used to depend on informal sources of credit like money lenders and relatives to purchase fertilizer, seeds, pesticides and other cultivation equipments. Main objectives of this scheme are;
1. To provide institutional credit to the farmers at the cheap rate of interest
2. To provide credit at the time of requirement
3. To support Post-harvest expenses
4. Working capital for maintenance of farm assets and activities allied to agriculture
5. Investment credit requirement for agriculture and allied activities (land development, pump sets, plantation, drip irrigation etc.)
6. Consumption requirements of farmers
Who implemented this scheme?
The KCC scheme is being implemented by the all Co-operative banks, Regional Rural Banks and public sector banks throughout the country. NABARD monitors the scheme in terms of the Cooperative Banks & RRBs and RBI in respect of Commercial Banks.
A new feature is started in the KCC scheme by the RBI and NABARD which provides ATM card to farmers which can be used at all ATMs and point of sale terminals.
What is the rate of interest under this scheme?
As per the rules of the priority sector lending the RBI has directed to all the commercial banks to provide 18% of the Adjusted Net Bank Credit to the agriculture sector.
Similarly, in the case of Regional Rural Banks (RRBs); 18% of their total outstanding advances are required to be towards agriculture and a sub-target of 8% has been set for lending to small and marginal farmers.
The farmers get the short term crop loans up to Rs. 3 lakh 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%.
Documents required to get KCC
1. Duly filled in application form
2. Identity proof- Voter ID card/PAN card/Passport/ Aadhaar card,/Driving License etc.
3. Address proof: Voter ID card/Passport/Aadhaar card/Driving license etc.
4. No dues certificate from the neighbouring area’s branches of the banks.
So this was the complete information about the Kisan Credit Card scheme of the government of India. This information is very crucial for different competitive exams to be held in India.