Kisan Credit Card Scheme

Kisan Credit Card Scheme

Objective

The scheme aims at providing adequate and timely cred it for the comprehensive credit requirements of farmers under single window for their cultivation and other needs as indicated below:

1. To meet the short term credit requirements for cultivation of crops
2. Post harvest expenses
3. Produce Marketing loan
4. Consumption requirements of farmer household
5. Working capital for maintenance of farm assets, activities allied to agriculture, like dairy animals, inland fishery and also working capital required for floriculture, horticulture etc.
6. Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals, floriculture, horticulture etc

Eligibility and credit limit

1. All farmers-individuals/Joint borrowers who are owner cultivators.
2. Tenant farmers, Oral lessees and Share Croppers etc.
3. SHGs or Joint Liability Groups of farmers including tenant farmers, share croppers etc.,

1. the crops cultivated as per proposed cropping pattern & scale of finance
2. post-harvest/ household / consumption requirements
3. Maintenance expenses of farm assets, crop insurance, Personal Accident Insurance Scheme (PAIS) and Asset insurance.
4. For every successive years (2nd, 3rd, 4th, and 5th year), the limit will be stepped up @10%.(short term credit limit sanctioned for 5th year will be about 150% of the first year limit allowed to farmers).
5. Investment credit requirement of small value in the nature of farm implements/ equipments etc (like sprayer, plough etc.,) and repayable within a period of one year will be included while fixing KCC limit (This portion of the credit will not be included for automatic step up during 2nd year to 5th year but credit requirement for this portion in each year will be reckoned for arriving at the maximum drawal limit for the respective year).
6. The short term loan limit arrived for the 5th year, plus estimated investment loan requirement (highest among the five years) above will be the Maximum Permissible Limit (MPL) and sanctioned as the Kisan Credit Card Limit.
7. Short term loan limit assessed for the first year or for the 2nd to 5th year plus the estimated investment credit limit required, will be the Maximum Drawal Limit (MDL) allowed in the account, for the particular year.
8. KCC will be in the nature of revolving account. Credit balance in the account, if any, to fetch interest at Savings bank rate.
9. Processing charges waived for KCC limit up to Rs.3 lacs.
10. Collateral security is waived for

• KCC accounts should be renewed annually, well before the above due dates, every year to continue the limit during the KCC validity period of 5 years.
• Eligible crops shall be covered under Crop Insurance Scheme – National Agricultural Insurance Scheme (NAIS).

Advantages of the KCC Scheme to the farmers

• Simplifies disbursement procedures
• Removes rigidity regarding cash and kind
• No need to apply for a loan for every crop
• Assured availability of credit at any time enabling reduced interest burden for the farmer.
• Helps buy seeds, fertilizers at farmer’s convenience and choice
• Helps buy on cash-avail discount from dealers
• Credit facility for 3 years – no need for seasonal appraisal
• Maximum credit limit based on agriculture income
• Any number of withdrawals subject to credit limit
• Repayment only after harvest
• Rate of interest as applicable to agriculture advance
• Security, margin and documentation norms as applicable to agricultural advance
• Access to adequate and timely credit to farmers
• Full year’s credit requirement of the borrower taken care of. Minimum paper work and simplification of documentation for withdraw  of funds from the bank.
• Flexibility to draw cash and buy inputs.
• Assured availability of credit at any time enabling reduced interest burden for the farmer. Flexibility of drawals from a branch other than the issuing branch at the discretion of the bank.

Salient features Scheme

• Eligible farmers to be provided with a Kisan Credit Card and a pass book or card-cum-pass book.
• Revolving cash credit facility involving any number of drawals and repayments within the limit.
• Limit to be fixed on the basis of operational land holding, cropping pattern and scale of finance.
• Entire production credit needs for full year plus ancillary activities related to crop production to be considered while fixing limit.
• Sub-limits to cover short term, medium term as well as term credit are fixed at the discretion of banks.
• Card valid for 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 drawal to be repaid within a maximum period of 12 months.
• Conversion/reschedulement of loans also permissible in case of damage to crops due to natural calamities.
• Security, margin, rate of interest, etc. as per RBI norms.
• Operations may be through issuing branch (and also PACS in the case of Cooperative Banks) through other designated branches at the discretion of bank.
• Withdrawals through slips/cheques accompanied by card and passbook.
• 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

Contents of Credit Card

Documents required to get KCC

• Duly filled in 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

Personal Accident Insurance Scheme -Salient features

• Nominated office of insurance company to issue a Master Insurance Policy to each DCCB/RRB covering all its KCC holders.
• Premium payable Rs.15/- for a one year policy while Rs.45/- for a 3-year policy.
• Designated insurance company will nominate one office at district level to function as nodal office for co-ordinating implementation of personal accident insurance scheme for KCC holders in the district.
• Insurance coverage available under Policy only from date of receipt of premium at insurance company
• Banks to ensure to incorporate name of Nominee in Kisan Credit Card-cum-Pass Book.
• Simplified claim settlement procedure evolved under Scheme whereby an Enquiry-cum-Verification Committee comprising Branch Manager of implementing bank, Lead Bank Officer and representative of insurance company to certify nature of accident causing disability/death and recommend settlement of insurance claims.

RuPay Kisan Credit Cards