The Kisan Credit Card (KCC) scheme is a government initiative launched in 1998 by the Reserve Bank of India (RBI) and NABARD to provide timely credit support to farmers. It aims to meet the short-term credit needs for cultivation and other allied activities through a simplified process.
This article explores the eligibility criteria, benefits, credit limit, and key rules under the KCC scheme in detail.
Kisan Credit Card Eligibility
Farmers must meet certain criteria to apply for a Kisan Credit Card:
- Eligible Farmers:
- Individual farmers who are owners/cultivators.
- Tenant farmers, oral lessees, and sharecroppers.
- Self-help groups (SHGs) or joint liability groups (JLGs) of farmers.
- Fishermen, dairy farmers, poultry farmers, and others involved in allied activities.
- Age:
- Minimum: 18 years
- Maximum: 75 years
- If the borrower is above 60 years, a co-applicant (legal heir) is required.
- Credit History:
- Should not be a defaulter to any financial institution.
- Must possess a good repayment record (if already availed of loans).
Kisan Credit Card Purpose
The Kisan Credit Card provides financial assistance to the farmers in a simplified way to meet the expenses towards the cultivation. The Kisan Credit Card is provided for the following purposes.
- Working capital for maintenance of farm assets and activities allied to agriculture
- To meet the short-term credit requirements for cultivation of crops
- Post-harvest expenses
- Produce marketing loan
Benefits of Kisan Credit Card
- Low-Interest Rates:
- Interest rates as low as 4% per annum with government subsidy (up to ₹3 lakh loan).
- Flexible Repayment:
- Repayment aligned with the harvesting schedule of crops.
- Grace period in case of natural calamities or crop failure.
- Insurance Cover:
- Personal accident insurance up to ₹50,000 (death) and ₹25,000 (disability).
- Personal accident cover is given to card holders under 70 years.
- Access to Multiple Needs:
- Covers crop cultivation, post-harvest expenses, household consumption, and working capital for allied agricultural activities.
- Easy Withdrawals:
- Operated like an ATM card with the option to withdraw cash through ATMs and bank branches.
- No Collateral:
- Loans up to ₹1.6 lakh typically do not require collateral.
Kisan Credit Card Limit
The loan amount sanctioned under KCC is based on various factors like land holding, crop type, input cost, and other expenses. Here’s a general breakdown:
| Purpose | Credit Limit (Approx.) |
|---|---|
| Crop Loan | Up to ₹3 lakh |
| Dairy, Poultry, Fishery, etc. | As per activity-based costing |
| Term Loan for Equipment | Varies (tractor, pumps, etc.) |
| Consumption Needs | Included in the overall limit |
Additional Notes:
- Loans above ₹2 lakh may require collateral or land mortgage.
- Credit limit may increase annually based on inflation and increased input cost.
Margin Requirements
| Limit Type | Margin % |
|---|---|
| Working Capital (Crop Production) | As per Scale of Finance decided by DLTC. No separate margin is insisted. |
| Term Loan (Other than Crop Production) | – Up to ₹2.00 Lakhs: Nil – Above ₹2.00 Lakhs: 15%–25% of loan |
2. Security Requirements
| Loan Quantum | Security in States without Online/Manual Charge Creation | Security in States with Online/Manual Charge Creation |
|---|---|---|
| Up to ₹2.00 Lakhs | Hypothecation of crops/assets created out of our finance | Same as left |
| Above ₹2.00 Lakhs to ₹2.50 Lakhs | – Hypothecation of crops/assets – Mortgage of landed properties | – Hypothecation of crops/assets – Creation of charge on land records |
| Above ₹2.50 Lakhs | – Hypothecation of crops/assets – Mortgage of landed properties | – Hypothecation of crops/assets – Mortgage of landed properties – Creation of charge on land records |
Kisan Credit Card Features
- Validity:
- KCC is typically valid for 5 years, subject to annual review.
- After completion of 5th year. The loan has to be closed and new loan has to be applied.
- Documentation Required:
- Aadhaar Card
- Land records or lease documents
- PAN card (if applicable)
- Passport-size photographs
- Bank account details
- Renewal & Review:
- Annual review of the limit and credit performance.
- Cardholders can renew or enhance the limit based on usage and repayment behavior.
- Interest Subsidy:
- 2% Interest Subvention by the Government of India.
- Additional 3% incentive for prompt repayment (making effective interest 4%).
- Usage Restriction:
- Credit should be used only for agriculture-related purposes.
- Misuse of funds may result in cancellation or penalty.
How to Apply for a Kisan Credit Card?
You can apply for a KCC through:
- Banks: Public sector, private banks, regional rural banks, and cooperative banks.
- Online Portals:
- PM Kisan Website
- Respective Bank Website.
Conclusion
The Kisan Credit Card is a powerful financial tool to empower India’s agricultural community by giving farmers easy access to institutional credit. By ensuring timely finance at affordable rates, KCC supports crop production, allied activities, and rural livelihood security.
If you’re a farmer or involved in allied sectors, applying for a KCC can give you both financial stability and peace of mind during the agricultural cycle.