Kisan Credit Card Scheme in India, Know More About It

Kisan Credit Card Scheme

The Kisan Credit Card (KCC) Scheme, initiated to ensure timely and sufficient credit for farmers, is a key instrument in the Government of India’s agricultural support system. Incepted with a primary focus on facilitating agricultural operations, the scheme has evolved over the years, extending its scope to cover allied and non-farm activities. Let’s delve into the details of the Kisan Credit Card Scheme, its objectives, types, delivery channels, benefits, and the application process.

Overview table of Kisan Credit Card Scheme

Aspect	Description
Evolution and Objectives	The scheme aims to provide timely and sufficient credit support to farmers for agricultural and allied activities.
Types of Cards	Various types of Kisan Credit Cards are available, including Magnetic Stripe Cards, Debit Cards with Biometric Authentication, EMV and RUPAY Compliant Chip Cards, and Biometric Authentication and Smart Cards.
Delivery Channels	Farmers can access credit through ATMs, Micro ATMs, Business Correspondents (BCs), Point of Sale (PoS) machines, Mobile Banking with IMPS capabilities, and Aadhaar-enabled Cards.
Benefits of Kisan Credit Card	Timely and adequate credit, subsidized interest rates, flexible repayment options, comprehensive credit coverage, simplified application process, access to multiple delivery channels, investment in allied and non-farm activities, risk mitigation through insurance, empowerment of small and marginal farmers, transparent and accountable transactions.
Fixation of Sub-limits	Sub-limits are fixed for short-term cash credit and term loans, ensuring operational and accounting convenience.
Eligibility Criteria	Farmers, including individual/joint borrowers, tenant farmers, oral lessees, sharecroppers, and members of Self Help Groups (SHGs) or Joint Liability Groups (JLGs).
Application Process	Both online and offline options are available. Applicants can apply by visiting the bank’s website or branch, respectively.
Required Documents	Application form, photographs, ID proof, address proof, landholding certification, cropping pattern details, security documents (if applicable), and any other documents as per sanction.

Kisan Credit Card Scheme Interest Rate

The KCC scheme, introduced to meet the credit needs of farmers, offers a significant interest subvention of 2% and a Prompt Repayment Incentive of 3%, resulting in a highly subsidized credit rate of 4% per annum. Originally designed for agricultural operations, the scheme was expanded in 2004 to include investment credit for various farming-related activities. In 2012, a working group led by Shri T. M. Bhasin revisited the scheme, aiming to simplify it and facilitate the issuance of Electronic Kisan Credit Cards.

Kisan Credit Card Scheme Features

The primary goal of the Kisan Credit Card scheme is to provide timely and adequate credit support through a simplified and flexible process. The key objectives include addressing short-term credit requirements for crop cultivation, post-harvest expenses, marketing loans, consumption needs of farmer households, working capital for farm asset maintenance, and investment credit for agricultural and allied activities.

Types of Cards

The Kisan Credit Card (KCC) scheme recognizes the diverse financial requirements of farmers engaged in various agricultural activities. To address these specific needs, different types of Kisan Credit Cards have been introduced, each designed to provide flexibility and accessibility. Below are the key types of Kisan Credit Cards available under the scheme:

1. Magnetic Stripe Cards with PIN: The most basic type of Kisan Credit Card includes a magnetic stripe for transaction processing and a Personal Identification Number (PIN) for added security. Farmers can use these cards at any bank’s ATMs and micro ATMs, making it a widely accepted and convenient option for accessing funds.
2. Debit Cards with Biometric Authentication: For enhanced security and seamless transactions, some banks offer Kisan Credit Cards with both magnetic stripes and PIN, alongside biometric authentication through UIDAI (Aadhaar authentication). This additional layer of security ensures that only authorized individuals can access and utilize the funds linked to the card.
3. Debit Cards with Only Biometric Authentication: In areas where the use of Aadhaar authentication is prevalent and UIDAI infrastructure is well-established, banks may issue Kisan Credit Cards with only biometric authentication. This streamlines the transaction process and aligns with the evolving technological landscape, ensuring secure and efficient financial transactions for farmers.
4. EMV and RUPAY Compliant Chip Cards: To adhere to global standards for integrated circuit cards, some Kisan Credit Cards come equipped with EMV (Europay, MasterCard, and VISA) and RUPAY compliant chip technology. These cards provide an added layer of security and compatibility, allowing farmers to transact seamlessly at various points of sale and other electronic payment platforms.
5. Biometric Authentication and Smart Cards: Banks may issue Kisan Credit Cards that incorporate biometric authentication along with smart card technology. The use of common open standards, as prescribed by the Institute for Development and Research in Banking Technology (IDRBT) and Indian Banks’ Association (IBA), ensures interoperability and compatibility, facilitating smooth transactions with input dealers and sales proceeds crediting.

Delivery Channels

The success of any financial scheme lies not only in its design but also in the ease with which beneficiaries can access and utilize its services. In the case of the Kisan Credit Card (KCC) Scheme, the delivery channels play a crucial role in ensuring that farmers can effectively transact and manage their credit accounts. Here is a detailed exploration of the various delivery channels provided under the Kisan Credit Card scheme:

1. ATMs (Automated Teller Machines) / Micro ATMs:
   • Description: Farmers holding a Kisan Credit Card can withdraw cash or perform other financial transactions at ATMs. Micro ATMs, a handheld device with banking functionalities, offer similar services in areas where traditional ATMs might be less accessible.
   • Advantages: Provides farmers with the flexibility to access funds and conduct transactions at their convenience, reducing the dependency on physical bank branches.
2. Business Correspondents (BCs) using Smart Cards:
   • Description: Business Correspondents act as intermediaries, delivering banking services in remote or rural areas. Smart cards linked to the Kisan Credit Card allow farmers to transact through BCs.
   • Advantages: Expands the reach of banking services to remote areas, ensuring that farmers can access their credit facilities without traveling long distances to a bank branch.
3. Point of Sale (PoS) Machines through Input Dealers:
   • Description: Input dealers, suppliers of agricultural inputs, can facilitate transactions through PoS machines. Farmers can make purchases using their Kisan Credit Cards, streamlining the procurement process.
   • Advantages: Integrates credit facilities seamlessly into the agricultural supply chain, enhancing the efficiency of input procurement for farmers.
4. Mobile Banking with IMPS (Immediate Payment Service) capabilities / IVR (Interactive Voice Response):
   • Description: Mobile banking applications and IVR systems allow farmers to access their Kisan Credit Card accounts through their mobile phones. IMPS capabilities enable quick and secure fund transfers.
   • Advantages: Empowers farmers with the flexibility to manage their credit accounts using mobile devices, promoting financial inclusion in areas with limited physical infrastructure.
5. Aadhaar-enabled Cards:
   • Description: Aadhaar-enabled Kisan Credit Cards integrate the Aadhaar authentication system, providing an additional layer of security and facilitating seamless transactions.
   • Advantages: Enhances security measures and interoperability, aligning with the government’s Aadhaar authentication infrastructure.

Benefits of Kisan Credit Card Scheme

The Kisan Credit Card (KCC) Scheme, introduced by the Government of India, is a revolutionary initiative aimed at providing financial assistance and support to farmers across the country. The scheme comes with a host of benefits that significantly contribute to the economic well-being of farmers and the overall growth of the agricultural sector. Let’s delve into the detailed benefits of the Kisan Credit Card Scheme:

1. Timely and Adequate Credit: One of the primary advantages of the Kisan Credit Card Scheme is its ability to provide farmers with timely and adequate credit. This is crucial for ensuring uninterrupted agricultural operations, enabling farmers to purchase seeds, fertilizers, pesticides, and other inputs when needed.

2. Subsidized Interest Rates: Farmers enrolled in the KCC Scheme enjoy the benefit of subsidized interest rates. The government provides an interest subvention of 2%, reducing the financial burden on farmers and making credit accessible at a highly affordable rate of 4% per annum. Additionally, a Prompt Repayment Incentive of 3% further encourages timely loan repayment.

3. Flexible Repayment Options: The scheme offers flexibility in repayment, allowing farmers to repay the loan amount based on their crop cycles and income generation. This tailored approach ensures that farmers can manage their finances more effectively, aligning repayments with their cash flows from agricultural activities.

4. Comprehensive Credit Coverage: The Kisan Credit Card Scheme provides comprehensive credit coverage, addressing various financial needs of farmers. It covers short-term credit requirements for crop cultivation, post-harvest expenses, marketing loans, consumption needs of farmer households, working capital for farm asset maintenance, and investment credit for agricultural and allied activities.

5. Simplified Application Process: The application process for the Kisan Credit Card is streamlined and farmer-friendly. It can be done both online and offline, offering convenience to farmers. The simplified documentation process ensures that farmers can easily apply for and obtain the Kisan Credit Card, reducing bureaucratic hurdles.

6. Access to Multiple Delivery Channels: The KCC Scheme ensures that farmers can access credit through multiple delivery channels, enhancing convenience. Whether through ATMs, Micro ATMs, Business Correspondents (BCs), Point of Sale (PoS) machines, or Mobile Banking with Immediate Payment Service (IMPS) capabilities, farmers have various options to transact seamlessly.

7. Investment in Allied and Non-farm Activities: The scheme has evolved to include investment credit for allied and non-farm activities, expanding its scope beyond traditional crop cultivation. This diversification allows farmers to explore additional income-generating avenues, such as animal husbandry, horticulture, and agro-processing.

8. Risk Mitigation through Insurance: Farmers availing credit through the Kisan Credit Card Scheme benefit from risk mitigation measures. The scheme encourages farmers to invest in crop insurance, Personal Accident Insurance Scheme (PAIS), and asset insurance. These measures provide a safety net against unforeseen events, ensuring the financial stability of farmers.

9. Empowering Small and Marginal Farmers: The KCC Scheme plays a crucial role in empowering small and marginal farmers who often face challenges in accessing formal credit. By providing them with a streamlined and subsidized credit facility, the scheme contributes to reducing financial disparities and promoting inclusive growth in the agricultural sector.

10. Transparent and Accountable Transactions: Through the adoption of technology and electronic Kisan Credit Cards, the scheme promotes transparent and accountable financial transactions. Farmers can track their transactions, ensuring financial discipline and accountability in credit utilization.

Fixation of Sub-limits

Recognizing the differences in interest rates, repayment schedules, and norms for short-term and term loans, the KCC scheme bifurcates the card limit into separate sub-limits. These sub-limits cater to short-term cash credit and term loans, ensuring operational and accounting convenience for both farmers and banks.

Eligibility Criteria of Kisan Credit Card Scheme

1. Farmers – Individual/Joint Borrowers:
   • The Kisan Credit Card scheme extends eligibility to individual and joint borrowers who are owner-cultivators. This category includes those directly involved in agricultural activities on their own land.
2. Tenant Farmers, Oral Lessees & Share Croppers:
   • The scheme recognizes the vital role played by tenant farmers, oral lessees, and sharecroppers, ensuring their inclusion in the eligibility criteria.
3. Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of Farmers:
   • Farmers associated with Self Help Groups (SHGs) or Joint Liability Groups (JLGs), including tenant farmers and sharecroppers, are eligible to apply for the Kisan Credit Card.

Apply Online Kisan Credit Card Scheme

The application process for the Kisan Credit Card is designed to be straightforward, offering both online and offline options for the convenience of farmers.

1. Online Application:

• Visit the Bank’s Website:
  • Farmers interested in applying for the Kisan Credit Card can visit the official website of the bank they wish to apply to.
• Select Kisan Credit Card Option:
  • From the list of available options, choose the “Kisan Credit Card” option. This directs the applicant to the specific section dedicated to KCC applications.
• Fill the Online Form:
  • Click on the “Apply” button to access the online application form. Provide all the required details accurately, including personal information, landholding details, and any other particulars as specified.
• Submission and Reference Number:
  • After completing the form, submit it through the online portal. Upon successful submission, the applicant receives an application reference number. This serves as a tracking identifier for the application.
• Bank’s Response:
  • Eligible applicants can expect the bank to respond within 3-4 working days, initiating the next steps of the application process.

2. Offline Application:

• Visit the Bank’s Branch:
  • Alternatively, applicants can choose to visit the branch of the chosen bank in person.
• Download and Fill Application Form:
  • Download the Kisan Credit Card application form from the bank’s official website. Fill in all the required details manually.
• Submit at the Bank:
  • Take the filled application form to the bank branch and submit it to the designated representative. The bank staff will guide the applicant through the subsequent steps.

Required Documents for Kisan Credit Card Application

1. Application Form:
   • Duly filled and signed application form.
2. Photographs:
   • Two passport-size photographs of the applicant.
3. ID Proof:
   • Valid ID proof such as Driving License, Aadhar Card, Voter Identity Card, or Passport.
4. Address Proof:
   • Proof of address, which may include documents like a Driving License or Aadhar Card.
5. Landholding Certification:
   • Document certifying the landholding, duly verified by revenue authorities.
6. Cropping Pattern Details:
   • Information about the crops grown, along with acreage details.
7. Security Documents:
   • For loan limits above a specified amount (e.g., Rs. 1.60 lakhs or Rs. 3.00 lakhs), relevant security documents may be required.
8. Any Other Documents as per Sanction:
   • Additional documents specified by the bank as per the sanctioning process.

In conclusion, the Kisan Credit Card scheme stands as a pivotal initiative, fostering financial inclusion and empowering farmers with timely and accessible credit facilities. As it continues to adapt to evolving needs, it plays a crucial role in sustaining and enhancing India’s agricultural landscape.

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