Kisan Credit Card Scheme

Objective of Kisan Credit Card Scheme

The scheme aims at providing adequate and timely credit 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

Kisan Credit Card Scheme

Eligibility and credit limit of Kisan Credit Card Scheme

Eligibility
• 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.,
Loan amount
●Short term credit limit is fixed for the first year depending upon the crops cultivated as per
proposed cropping pattern & scale of finance post – harvest/ household / consumption
requirements
●Maintenance expenses of farm assets, crop insurance, Personal Accident Insurance Scheme
(PAIS) and Asset insurance.

Kisan Credit Card Scheme
● 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).·
● 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).
● 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

• 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.
• KCC will be in the nature of revolving account. Credit balance in the account, if any, to fetch
interest at Savings bank rate. (Kisan Credit Card Scheme)
• Processing charges waived for KCC limit up to Rs.3 lacs. Collateral security is waived for
limit of up to Rs.1 lac, limit up to Rs.3 lacs for loans with tie-up arrangement for recovery.
• 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. (Kisan Credit Card Scheme)

Kisan Credit Card Scheme
• Eligible crops shall be covered under Crop Insurance Scheme – National Agricultural
Insurance Scheme (NAIS). (Kisan Credit Card Scheme)

Advantages of the Kisan Credit Card 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

Kisan Credit Card Scheme
• 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.
• 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 Kisan Credit Card 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.

Kisan Credit Card Scheme
• 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. (Kisan Credit Card Scheme)
• 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

Kisan Credit Card Scheme

Contents of Credit Card

Beneficiaries covered under the Scheme are issued with a credit card and a pass book or a
credit card cum pass book incorporating the name, address, particulars of land holding,
borrowing limit, validity period, a passport size photograph of holder etc., which may serve
both as an identity card and facilitate recording of transactions on an ongoing basis.
Borrower is required to produce the card cum pass book whenever he/she operates the account.