Kisan Credit Card (KCC)

The features and benefits of Kisan Credit Card are:

• Interest rate can be as low as 2.00%
• Collateral free loans up to Rs. 1.60 lakh
• Crop insurance scheme is also provided to farmers
• Following Insurance coverage is provided
  • Up to Rs. 50,000 against Permanent Disability and Death
  • Up to Rs. 25,000 is provided against other risks
• Repayment period is based on the harvesting and marketing period of the crop for which the loan amount was taken out
• Loan amount up to Rs. 3.00 lakh can be taken out by the card holder
• Collateral is not required on loans up to Rs. 1.60 lakh
• Farmers get high interest rate on the savings in their Kisan Credit Card Account
• Simple interest rate is charged as long as the user makes prompt payment. Otherwise compound interest rate becomes applicable

Related Read: Kisan Credit Card (KCC) Loan Scheme in India

The Kisan Credit Card scheme was set by NABARD (National Bank for Agriculture and Rural Development) and has been followed by all the major banks in India. Top banks that offer KCC are:

State Bank of India – State Bank of India is one of the largest issuers of Kisan Credit Cards. The interest charged on SBI Kisan Credit Card can go as low as 2.00% per annum on loans up to Rs. 3.00 lakh.

Punjab National Bank – PNB Kisan Credit Cards are one of the most requested credit cards. The application process is quite easy and users can expect speedy disbursal post processing.

HDFC Bank – HDFC Bank Kisan credit cards offer loans at an interest rate of around 9.00%. Maximum credit limit that is offered is Rs. 3.00 lakh. Cheque book with credit limit of Rs. 25,000 is also issued. Moreover, in case a farmer suffers from crop failure then they can get an extension up to 4 years or more. Insurance coverage is also provided against crop loss because of natural calamities or pest attacks.

Axis Bank – Axis Bank Kisan Credit Cards offer loans charging interest rate starting from 8.85%. However, they provide loans at an interest rate lower than this in line with government subvention schemes.

Besides this there are other banks that also offer Kisan credit cards. These are:

The interest rate on KCC varies from bank to bank. However, most banks provide Interest subvention loans in line with the Government Schemes where the interest charged can be as low as 2.00%.

Kisan Credit Card Eligibility Criteria

• All farmers who are either individuals/Joint borrowers of the land and involved in farming or allied activities
• Individuals who are owner cum cultivators
• All the Tenant farmers or Oral lessees and Share Croppers in the agricultural land
• Self Help Groups or Joint Liability Groups including tenant farmers or sharecroppers
• Farmers should be eligible for a production credit of Rs.5,000 and above, and then he/she is entitled to a KCC.
• All such farmers who are eligible for short term credit loan towards crop production or any allied activities as well as non-farm activities
• The farmers should be the residents of the bank’s operational area

Documents Required For KCC

People who want to avail a Kisan Credit Card must submit establish their identity & address. Applicant can submit any one of the below given documents.

Besides this, the bank will also require passport size photographs, and any other document that it deems fit.

Online

Farmers who want to avail KCC online can easily do so by following the below given steps:

• Visit the preferred bank’s website and visit their Kisan Credit Card Section
• Download & print the Application form
• Duly fill out the Application form
• Submit the application and necessary documents at the nearest bank’s branch
• The loan officer will share the necessary information with the applicant
• Once the loan amount is sanctioned the card will be dispatched
• Customers can start using the credit card once they receive the KCC.

Branch Visit

Farmers seeking Kisan Credit Card can also visit a bank of choice and get in touch with a bank official. The official will help the applicant in filling out the form. Afterwards, the loan officer will share the necessary details and process the application.

Kisan Credit Cards are different from the regular unsecured credit card. The workings of KCC are different too. They work in the following manner.

• Customer must visit the bank and then apply for a Kisan Credit Card
• The loan officer will then decide on the loan amount that will be given to the applicant. It can go up to Rs. 3.00 lakh
• Once the amount has been sanctioned, user will be issued the bank’s Kisan credit card
• Cardholder can now purchase items against the limit of credit extended
• The interest rate will be applicable on only the amount of credit taken
• Timely payment will ensure that minimal interest rate is applied on the loan taken out

KCC offers dynamic loan to the cardholder. This means that user can take out a loan amount as per their needs against a maximum credit limit. This will ensure that they don’t have to pay a large interest associated with a big principal amount.

Suggested Read: Kisan Credit Card: A Boon for Farmers in India

After Budget 2020, the government has taken a major step in the direction of making institutional credit more accessible to the farmers. They are doing this by merging the Kisan Credit Card (KCC) Scheme with the Kisan Samman Nidhi Scheme. The beneficiaries of Kisan Samman Nidhi Scheme will now be able to avail Kisan Credit Card under which they can avail loans for farming at a concessional rate of only 4%.

How to Apply for Kisan Credit Card under PM Kisan Samman Nidhi Scheme

To apply for a Kisan Credit Card under this scheme, the following steps need to be followed:

• A one-page form should be filled which will be available on all commercial banks’ website and also published in all leading newspapers.
• The applicant will have to fill basic information like land record and the crop sown.
• Form can also be filled and submitted at Common Service Centers (CSC) and they are also responsible for transferring the filled forms to the bank branches

Banks have also been instructed to motivate existing customers to avail credit under the scheme.

The COVID-19 pandemic has led to loss of income and disrupted cash flow for a lot of people. In view of this situation, the Reserve Bank of India has given permission to financial institutions, banks and NBFCs to extend the moratorium on EMI payment for 3 more months till 31-August-2020. The facility is extended to all loan accounts which have their payment date falling between March 1, 2020 and August 31, 2020 and were not already overdue.

Points to Remember

Eligibility – Anyone whose repayment date is falling between 1 March 2020 and 31 August 2020.

How to Apply – Customers will have to get in touch with the bank in order to apply for this moratorium period. However, some banks will automatically apply the moratorium period on the loan account if the customer skips the payment between 1 March 2020 and 31 March 2020.

What Loan repayments are covered – The facility is valid on the following payments:

•  Principal and/or interest components
• Bullet repayments
• Equated Monthly Instalments (EMIs)
• Credit Card Statements

Moratorium Period – A moratorium period of only three months can be taken. It is advised that customers make their payments to avoid interest charges.

Turn off Auto-pay – Customers planning to avail Moratorium period should ensure that they have stopped the standing instruction they provided at the bank.

Credit Score – Availing this facility won’t affect your credit score or be counted as a default on payment.

Apply on Multiple Loan Accounts – Customers can apply for the moratorium on any and all loan accounts that they have.

Should You Apply for Moratorium Period?

During the moratorium period, the interest will be accrued on the principal outstanding amount. Therefore, avail the moratorium only if it is absolutely necessary.

What is a Kisan Credit Card Loan?

Kisan Credit Card loan is a Government of India scheme under NABARD that aims to offer farmers loans at low interest rates. The interest rate after subvention can go as low as 2.00%. This will ensure that the farmers do not fall into debt traps or lose out on cultivating crops.

How is Kisan Credit Card Loan amount calculated by the bank?
The loan amount that is extended to the cardholder is decided by the loan officer at the time of application. Various factors are taken into consideration like farm area, expenses related to farming, consumption, etc.

What security/collateral will the bank demand to sanction the loan amount?
Banks won’t demand security or collateral as long as the loan amount is less than Rs. 1.60 lakh. Beyond that, banks can ask for security that it deems fit. Collateral can be in the form of handing over the crops for which the loan was taken out or other assets like tractors, trolleys and so on.

What is the tenure of the loan that can be taken out via Kisan Credit Card?
The maximum tenure can be 5 years.

What interest rate will be applied on the loan amount taken via a Kisan credit card?
Interest rate may depend on the individual applying for the loan. However, customers can use the below given table as a reference.

Do note that the interest charged will vary from case to case basis and will be dependent on the bank disbursing the amount.

What are the factors in calculating the credit limit of the Kisan Credit Card?
The initial credit limit on the card is offered on the basis of:

• Land area, crop sown, etc.
• Pre & post-harvest expenditure and household requirements.
• Other Expenses required for the maintenance of crop and farm assets which includes crop insurance as well as Personal Accident Insurance Scheme

How Can I apply for this credit card?
In case you are eligible for this card, you may either apply online or obtain an application form by visiting the nearest bank branch or NABARD office. The application form for Kisan Credit Card (KCC) in Hindi is also available for farmers who cannot understand English.

What are the incentive and waivers available on these credit cards?
Banks at their own discretion do not require collateral security as long as the loan amount is less than Rs.1.60 lakh