What is Kisan Credit Card (KCC)

What is Kisan Credit Card (KCC)

The Kisan Credit Card Scheme is in operation throughout the country and is implemented by Commercial Banks, Cooperative Banks and Regional Rural Banks (RRB). The scheme has facilitated in augmenting credit flow for agricultural activities. The scope of the KCC has been broad-based to include term credit and consumption needs. The KCC Scheme has since been simplified and converted into ATM enabled debit card with, inter-alia, facilities of one-time documentation, builtin cost escalation in the limit, any number of drawals within the limit etc. which eliminates the need for disbursement through camps and mitigates the vulnerability of farmers to middlemen.

Eligibility: Under the scheme, Banks may issue Kisan Credit Cards to the farmers who are otherwise eligible for sanction of short term credit for crop production, allied activities and other non-farm activities. 

The farmers should come from the operational area of the Branch.The farmers under the scheme will be issued a credit card-cum-passbook incorporating the name, address, particulars of land holding, borrowing limit / sub-limits, validity period, etc. to facilitate recording of the transactions on an on-going basis. The passbook, among others, would provide for a passport size photograph of the beneficiary. 

Quantum of Finance and margin: 
  • For production / short term purposes - Loan amount will depend upon the type of crop, area under cultivation and scale of finance.
  • Short term working capital - For ancillary activities and minor investment of medium term nature.
  • Short term credit for consumption / domestic needs to the extent of upto 25 percent of gross estimated income of the farmer and maximum Rs.50,000/=.
  • Finance against storage receipts / produce marketing may be considered maximum upto 50 percent of the price of the produce prevailing at the time of storage / sanction of loan. Limits / advances upto Rs.10 lakhs per farmer can be extended for a maximum period of 12 months. However, the amount of finance to the extent of net of loan may be made available to the farmer.
Type of Facilities: 

(a) Revolving Cash Credit – Annual Review. The farmer should be allowed for any number of drawals and repayment within the limit. 

(b) The review may result in the continuation of the facility, enhancement of the limit or cancellation of the limit/withdrawal of the facility, depending upon the performance of the borrower. 

(c) The aggregate of credits into the account during the 12 months period should at least be equal to the maximum outstanding in the account. 

(d) No drawal in the account should remain outstanding for more than 12 months in case of normal crops and 18 months in case of sugarcane and banana crops. 

(e) In case of reschedulement of the period of repayment on account of natural calamities affecting the farmer, the period for reckoning the status of operations as satisfactory or otherwise would get extended together with the extended amount of limit. When the proposed extension is beyond one crop season, the aggregate of debits for which extension is granted should be transferred to a separate term loan account with stipulation for repayment in instalments as per existing guidelines. 

(f) As a measure of incentive for card holders with good performance, the Branches may at the time of review, enhance the credit limit suitably to take care of increase in cost of inputs / labour, change in cropping pattern, etc. 

Note: the Guest writer is working in PSU Bank. Feel free for any queries related to KCC Loan.

Next Post »