Kisan Credit Card was introduced in the late 90s by the Government of India, partnered with RBI and NABARD. The card is offered to the farmers of the nation so that they can easily avail of credits from the banks for financing their farming needs. With this card, farmers will also get relaxation in the repayment period. Unlike earlier days, now for a farmer getting credit is much easier with this Kisan Credit Card.
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| Kisan Credit Card |
Kisan Credit Card Definition and History
Kisan Credit Card is a short term loan facility given by the Government of India to the farmers. It was first initiated in the late 90s by the finance minister. Later on, RBI and NABARD have joined hands with the government of India to start this card facility for the farmers.
Kisan Credit Card Features and Objective
- Financial help to meet the farming related needs and other agricultural problems
- Insurance coverage for the damaged crops due to pest attacks and such.
- Regular insurance coverage for the cardholders
- KCC holders can opt for the National Crop Insurance scheme for free.
- This card is valid for up to 5 years
- As it is a short term loan facility, the loan must be repaid with 1 year of time.
- Interest rates and security in this credit follow RBI norms.
- Credit limits can be increased at any point in time, depending on the nature of crops and harvesting costs etc.
Kisan Credit Card Eligibility Criteria :
- The card is for the farmers but unfortunately like all other government schemes, this Kisan Credit Card scheme has also some eligibility criteria. Some of them are
- If a farmer can produce a credit of Rs. 5000 or above then the farmer is eligible to get the card.
- The farmer should not have a bad credit history. Like he/she should not be a credit defaulter in the past.
- The eligibility also depends on the landholdings of the farmer.
Participated Banks
All the cooperative banks, regional rural banks, nationalised banks, some of the private commercial banks participate in this scheme. They are providing Kisan Credit Card for the farmers. Along with this credit card, these banks provide passbooks and cheque books so that farmers can easily withdraw the money.
The leading banks are NABARD, SBI, IDBI, BOI and National Payment Corporation of India.
Credit Limit and Repayment
Under Kisan Credit Card, a farmer can withdraw up to Rs. 50,000/- depending upon his / her landholding and past credit history. Bank of India provides up to 25% of farmers gross income as credit.
The repayment of the loan is within 12 months i.e., 1 year but for Axis bank, the repayment limit is 5 years as the credit amount given by Axis bank is much higher than nationalised banks.
Benefit Under Kisan Credit Card
- It gives short term financial support to the agricultural issues faced by a farmer
- By holding the card, a farmer can also opt for National Crop Insurance
- The card brings personal insurance coverage to the farmers. Rs. 50,000/- for the death of any farmer and for any disabilities the amount is Rs. 25,000/-.
- Interest rates are much lower than regular loans
- No restriction of cash withdrawal under this scheme.
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