2 min read
05 Jan 2021

As per a June 2019 update, the Government of India intends to reach out to 1 crore farmers in 100 days through the Kisan Credit Card (KCC) Scheme. The KCC loan offers farmers a source of formal credit to avoid stepping into a debt trap associated with informal borrowings in the agricultural sector. Instead, you can avail of low-interest funding by obtaining a Kisan Card. To access this resource, learn more about the Kisan Card Scheme, its benefits and how to apply for it online.

Kisan Credit Card scheme

In the past, when farmers secured funding from the informal sector, it resulted in high-interest rates and landed them into a debt trap. The National Bank for Agriculture and Rural Development recommended KCC to tackle such debt traps. At times, people refer to this scheme as Pradhan Mantri Kisan Credit Card Yojana.

The Kisan Credit Card scheme was launched in 1998, and through this scheme, farmers get access to formal credit that they can use to buy seeds, fertilisers, pesticides and so on.

What is a Kisan Credit Card?

A Kisan Credit Card is a special provision for a farmer to access low-interest funding from a bank. Here, farmers are given a passbook containing details about the loan limit, landholding and beneficiary. Kisan Credit Cards are provided by commercial banks as well as state co-operative and regional rural banks.

Benefits of Kisan Credit Card

Here are some of the standout Kisan Credit Card benefits that farmers can enjoy:

  • Flexibility in loan repayment as farmers can pay post the harvest season
  • Uncomplicated loan disbursal procedure
  • Expandable credit limit based on income
  • Low-interest rates compared to other loans
  • One loan for all agricultural needs
  • Availability of crop insurance
  • Discounts from dealers on selected transactions

Additional Read: Benefits of having a credit card

Credit limit available through Kisan Credit Card

While announcing the union budget of 2020-21, finance minister Nirmala Sitharaman presented a slew of measures for Indian farmers under the government's vision of 'Aspirational India'. Among the many schemes announced, the finance minister has set the agricultural credit target for Indian farmers at Rs. 15 lakh crore for the financial year of 2020-21.

According to the finance minister, all eligible farmers under the PM-Kisan scheme will be covered under the Kisan Credit Card scheme.

According to RBI guidelines, lenders are free to decide the amount they want to sanction. This means that there is no fixed credit limit. For example, one institution may have a limitation that applies to all applicants, while another may cap the amount at a percentage of the farmer's income. Similarly, the financial institution may also consider crop area and patterns before setting the credit limit.

Eligibility criteria of Kisan Credit Card

To get funding through a Kisan Credit Card, you must fall under one of these categories

  • An individual farmer or a joint borrower who is an owner-cultivator
  • Self-help group/ joint liability group that includes farmers, sharecroppers, tenant farmers, etc.
  • Tenant farmer, oral lessee, and sharecropper

Additionally, this scheme extends to the fisheries and animal husbandry sector. Thus, you can apply if you farm goats, fish, sheep and poultry.

How to apply for a Kisan Credit Card online?

To get a Kisan Credit Card online, apply via your preferred lender's website. Here's a step-by-step guide on how to go about it.

Steps to apply for Kisan Credit Card online

  • Visit the bank's website
  • Scan through the list of available credit cards and select 'Kisan Credit Card'
  • Apply for the card by filling in details on the application page and then clicking on 'Submit'
  • Note the reference number and wait for the bank to process your application
  • Submit the right documents to the bank and obtain the Kisan Credit Card

Revised Kisan Credit Card scheme/ Pradhan Mantri Credit Card yojana

RBI makes changes in the Kisan Credit Card Scheme as per the needs of the agriculture sector. In 2012, the scheme was revised twice: once to modify instructions about disbursement and repayment, account classification and other features, and a second time to facilitate the issue of electronic Kisan Credit Cards. Similarly, the 2016 revision made changes to paragraph number 13.

KCC loan borrowers stand to get a free smart card-debit card along with a Kisan Credit Card. However, if you are not eligible for this scheme and would like a card with ample benefits, consider the Bajaj Finserv RBL Bank SuperCard. It lets you make 50-day, interest-free cash withdrawals from ATMs, obtain a 90-day, interest-free personal loan from your credit limit, and convert purchases above Rs. 2,500 into convenient EMIs. On the whole, it offers savings of up to Rs. 55,000 in a year.

To apply for this card online, check your pre-approved offer from Bajaj Finserv first. Single-step verification gives you instant approval and a chance to get a credit card through a customised deal.

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