The KCC scheme was launched by the NDA government in 1998. With this scheme the government aimed to satisfy short-term credit needs of farmers during harvesting and planting. It reduces the dependence of Indian farmers on informal lenders.
The whole procedure of getting the card has been simplified through this scheme for easy and faster processing without too much hassle for the farmer.
Who is eligible for KCC?
- All individuals who are farmers and cultivators as well as their joint borrowers are eligible for KCC.
- Tenant farmers, shared croppers, and those who are oral lessees.
- Joint liability groups of farmers, tenant farmers etc.
Process of Applying For KCC
The banks offering KCC allows online application:
- Visit the website and choose a KCC
- Click on the ‘Apply’ button
- An online application page opens
- Fill the details and click ‘Submit’
After submission, the system provides a reference number which has to be noted and can be used for further queries.
If you are eligible for KCC then the bank will inform you within 3 to 4 working days for the next proceedings along with the details for documentation.
Documents Required For KCC
The RBI states the documents needed for application of KCC must be as per the bank’s internal guidelines and differs with various banks. They are:
- Identity proof (Aadhar card, Voter ID, PAN card, driving license)
- Address proof (Aadhar card, Voter ID, PAN card, driving license)
- Passport size photographs
- Duly filled and signed application
Once application is approved, the bank processes KCC in 7-10 days and you‘ll receive an acknowledgement with application number which can be used further.
Factors Taken Into Account To Decide KCC Credit Limit
- KCC comes with a short-term credit limit, which is decided by the crop that a farmer/group of farmers is cultivating.
- The household requirement post harvest is also considered.
- The farm’s maintenance expense, accidental insurance, small equipment investment, crop insurance, asset maintenance, and insurance are also considered.
- In addition, every successive year, the bank steps up the credit limit by 10% upto the 5th year to cater for inflation and other factors.
Highlights of the KCC
- The KCC borrowers get a Debit cum ATM card called the State bank Kisan Card through which they will be able to withdraw money from ATMs and PoS terminals.
- There is no processing fee for a credit amount of up to ₹3 lakhs.
- Eligible crops get covered under the National agriculture insurance scheme.
- KCC accounts must be renewed annually before their due date in order to keep getting a 10% hike in credit limit upto the 5th
- There is no collateral security required for –
- Credit limit up to ₹ 1 lakh
- Credit limit up to ₹ 3 lakh in case of joint arrangement for recovery.
- Loan is disbursed in the form of cash.
Loan Repayment
| Crop type | Repayment schedule |
| Kharif (1st April- 30th September) | By 31st January |
| Rabi (1st October- 31st March) | By 31st July |
| Multiple Crops/double season
|
By 31st July |
| Long term Crops
|
12 months from the date of disbursement |