Kisan credit Card Scheme
Jan 11, 2017
Why in news:
Recently Prime minister of India announced that Three crore farmers who have Kisan Credit Cards, will be given RuPay debit cards within three months.
The Kisan Credit Card (KCC) scheme was introduced in August 1998
Objective of scheme:
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:
- To meet the short term credit requirements for cultivation of crops
- Post harvest expenses
- Produce Marketing loan
- Consumption requirements of farmer household
- 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.
- Investment credit requirement for agriculture and allied activities like pump sets, sprayers, dairy animals, floriculture, horticulture etc
- All farmers-individuals/Joint borrowers who are owner cultivators.
- Tenant farmers, Oral lessees and Share Croppers etc.
- SHGs or Joint Liability Groups of farmers including tenant farmers, share croppers etc.,
Advantages to 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 of 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