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Kisan Credit Card Loan was established with the intention of giving farmers access to sufficient and timely loans for their agricultural operations. The farmers receive a 3% prompt repayment incentive and a 2% interest subvention from the Indian government, which translates into a highly subsidized annual rate of 4% for the credit.
In 2004, the program was expanded to include farmers’ investment credit requirements for non-farm and allied activities. A working group led by Shri T. M. Bhasin, CMD of Indian Bank, reviewed the program again in 2012 with the goal of streamlining it and making it easier to issue Electronic Kisan Credit Cards. The plan gives banks extensive instructions on how to operationalize the Kisan Credit Card Loan .
Benifits of Kisan Credit Card Loan
- Facility for Digital BKCC Renewal
- Loans are available to all farmers, including renters and sharecroppers.
- A loan of at least Rs. 5,000 is required.
- Production credit and investment credit are covered by the credit facility.
- Up to Rs. 3 lakh in loans, interest would be charged at 7% per annum, subject to the Indian government subsidizing the bank’s interest on these advances.
- Interest on the account’s credit balance at the SB rate
- Protection afforded by Pradhan Mantri Fasal Bima Yojana Concession is offered in ROI to current, consistent borrowers.
- The five-year limit is in effect.
- eligible for a complimentary Rs. 50,000/insurance policy under the Personal Accident Insurance Scheme
- There are no processing fees for loans totaling up to Rs 3 lakhs.
- Inspection fees are free for loans totaling up to Rs 3 lakhs.
Eligibility for Kisan Credit Card Loan
- Minimum Age: 18
- Age 75 is the maximum.
- If the borrower is an elderly person (over 60), another borrower must be included; this additional borrower must be the borrower’s legitimate successor.
- Every farmer, including owners and individual/joint cultivators
- Sharecroppers, oral lessees, tenant farmers, etc.
- Tenant farmers are included in SHGs or joint liability groupings.
Documents Required
- Proof of Identity :- PAN Card, Aadhaar Card, Voter’s ID Card, Passport, Driving Licence or any other government approved photo ID
- Proof of Address :- Aadhaar Card, Passport, Utility bills (not more than 3 months old) or Any other government approved address proof
- Proof of Income :- Bank statement for the last 3 months, Salary slips for the last 3 months, Audited financials for the last two years (for self-employed), Form 16, etc.
How to Apply?
- Go to the bank of your choice that has the Kisan credit card available. Download the KCC online application if the bank permits it.
- Completion of the application and submission to the loan officer
- When all the variables are taken into account, the loan officer will determine the maximum loan amount for a Kisan credit card and request collateral if the loan amount exceeds Rs. 1.60 lakh.
- The farmer will receive their Kisan credit card following processing.
Kisan Credit Card Loan Usage
The customer can immediately begin making direct purchases or cash withdrawals with their credit card as soon as they receive it. Also, some banks provide checkbooks.The customer is responsible for making sure they return the money on time. By doing this, it will be ensured that the loan will only accrue simple interest and not compound interest. The farmer will pay less if simple interest is used as opposed to compound interest, which will result in a larger payoff.
Interest Rate
The Bank sets the interest rate, which is determined by a number of variables including the farmer’s credit history, the acreage farmed, the crop being farmed, etc. The RBI, however, monitors the highest interest rate that a bank can provide.
In what areas can one use the loan on Kisan credit card?
- Expenses related to crop production
- Funds for day-to-day activities (Working Capital)
- Expenses towards the maintenance of farming assets and other allied activities such as dairy animals, etc.
- Marketing related expenses
conclusion
The Kisan Credit Card (KCC) was introduced to protect Indian farmers from the exorbitant interest rates imposed by unorganized sector money lenders. Farmers are able to borrow money as needed. Additionally, the interest rate is dynamic, so that clients who pay on time will pay less in interest. Below are more credit card data.