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Kisan Credit Card

Focus: GS III- Agriculture

Why in News?

Recently, the Union Minister of Fisheries, Animal Husbandry and Dairying reviewed the progress in issuance of Kisan Credit Cards to poor farmers from the Animal Husbandry, Dairying & Fisheries Sector with Banks & Regional Rural Banks.

About Kisan Credit Card (KCC)

  • The Kisan Credit Card (KCC) scheme is a credit scheme introduced in August 1998 by Indian banks.
  • This model scheme was prepared by the National Bank for Agriculture and Rural Development (NABARD) on the recommendations of R. V. Gupta committee to provide term loans for agricultural needs.
  • Its objective is to meet the comprehensive credit requirements of the agriculture sector and by 2019 for fisheries and animal husbandry by giving financial support to farmers.
  • Participating institutions include all commercial banks, Regional Rural Banks, and state co-operative banks.

Provision of the KCC Scheme

  • KCC covers post-harvest expenses, produce marketing loan, consumption requirements of farmer household, working capital for maintenance of farm assets and activities allied to agriculture, investment credit requirement for agriculture and allied activities.
  • The scheme comes with an ATM-enabled RuPay debit card with facilities for one-time documentation, built-in cost escalation in the limit, and any number of withdrawals within the limit.
  • The scheme has short term credit limits for crops, and term loans.
  • Individuals involved in farming and agricultural activities can apply for the KCC. Farmers who cultivate on the land of other people are also eligible to apply for the Card.
  • Farmers get the loan of up to Rs 3 Lakh at reduced Interest Rate of 7%. If a farmer manages to repay the loan amount on due date then another 3% rebate can be availed, making the effective Interest Rate as just 4%.
  • Farmers can use the KCC card for purchasing seeds, pesticides, fertilizers, for doing payment to labourers, for withdrawal of cash and for purchasing agriculture related products and equipment.
  • KCC credit holders are covered under personal accident insurance up to ₹50,000 for death and permanent disability, and up to ₹25,000 for other risk.

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