How to take a loan under the Revised Kisan credit card scheme?
In August 1998, the Kisan credit card scheme was inaugurated. This scheme was started for farmers on the basis of their capital to purchase farm inputs such as fertilizers, seeds, equipments etc., and cash withdrawal for their production requirements. The scheme was extended for the investment loan requirement of the farmers.
Introduction to Revised Kisan Credit Card Scheme
On 19 December 2020, the Revised Kisan credit card was introduced by Prime Minister Narendra Modi.
The main objective is to provide timely and sufficient credit support to the farmers under a single window from the banks for farmers’ cultivation and other needs. Farmers can take benefit from this scheme through all the public sector banks, cooperative banks, small finance banks, and regional rural banks nationwide.
The revised Kisan credit card scheme provides loans at low-interest rates to the farmers and repayment with easy terms. The revised Kisan credit card scheme also provides insurance coverage to the farmers for the failure of any crop. This can be due to natural calamities, pests, and disease. This scheme aims to provide some other needs as indicated below:
- Loan requirement for short-term cultivation crops.
- To manage the post-harvest expenses.
- To produce marketing loans.
- Consumption requirement of farmers’ families.
- Working capital is required to manage agricultural assets activities allied to agriculture, such as inland fishery, and dairy animals.
Eligibility and credit limit
- Any farmers who own cultivation land, be it individual or joint borrowers
- Sharecroppers, tenant farmers, and lessees.
- Self-help groups or joint liability groups.
- The beneficiary under the revised kisan credit card scheme for animals and fisheries are as follows:
- Inland fisheries and aquaculture:- All fishermen, fish farmers (individual /group /shareholder /tenant farmers) joint liability groups and women groups. Any fisheries-related activities such as tanks, ponds, open water bodies, hatcheries, raceways, and rearing units. All fishermen must hold necessary licenses for fish farming and must be owned or leased from the beneficiary.
- Marine fishers:- Beneficiaries mentioned above, who have registered boats, necessary fishing license/ fishing vessel/ permission for fishing in sea and estuary, and allied activities.
- Small reflective and Poultry and dairy:- All poultry farmers are eligible under this scheme. They can be either individual or they can be joint borrowers, JLG (Joint liability groups) or SHG (Self-help groups). It includes also sheep/ goats/ pigs/ birds under tenant farmers and having possessed sheds. Under the KCC scheme, all dairy farmers are eligible. They can be either individual or joint borrowers.
1) All farmers except marginal farmers
a) For single crop raising per year
As per the district-level technical committee, the finance scale for crops to the cultivated area size encloses a limit. This limit is set towards a consumption requirement of 10%/ household/ post-harvest. Further adding a saturation set towards maintenance and repair pricing of agriculture assets. This asset will include accident insurance or crop insurance such as asset insurance, health insurance, and PAIs.
b) For more than one crop raising per year
Who are raising more than one crop in a year a limit will be set up for the farmers. This relies on the cultivated crops as proposed in the cropping pattern for the initial year. Additionally, a 10% limit is specified towards escalated finance scale or cost escalation. This will be evaluated every successive year (from the 2nd to 5th year consequently). It is assumed that the same cropping patterns will be obtained by farmers, for the last 4 years. The limit may be cancelled in that case.
2) Permissible Limit
The short-term loan limit is for five years. The evaluated required loan amount for the long term is considered the maximum permissible limit.
For Marginal Farmers
On the basis of land, holding a flexible limit of Rs10000 to Rs 50000 is provided. It includes post-harvest barn storage-related loan needs and other agricultural expenses, consumption needs, etc.
It’s also adding short-term loan investments such as buying farm equipment and starting mini dairy poultry without relating it to the value of the land. For a period of five years, the compound revised Kisan credit card scheme limit is fixed.
For all revised credit card holders, an ATM card must be issued. On the number of debits and credits, there should be no restriction. The drawing limit is allowed to be drawn using any of the following channels.
- Managing through a Cheque facility
- Drawing by using ATM / Debit cards
- Operate by using Business promoter and small branches
- Operate by using PoS available in Sugar Mills firms, etc.
- Operate through a branch.
Rate of interest
The rate of interest depends upon the bank’s desire and it will be linked to the base rate.
The term loan element shall be repayable within 5 to 9 years. It depends on the type of activity or investment, as per extant instructions applicable to investment loans.
According to the expected harvesting and marketing duration for the crops, the repayment duration of the loan amount for short-term loans is fixed by banks.
Security requirements may be as under:
- According to the RBI guidelines, charges of crops up to the card limit of Rs 1.60 lakh.
- Places where the facility of online creation of charges in banks on the land records will be safe.
- Bank may consider sanctioning loans on charges of crop up to a card limit of Rs.3 lakh without insisting on collateral security.
There are some other features In the Revised KCC scheme:-
- As per the guidance of the government of India or the state government, interest incentives are for immediate repayment. the farmers will be aware of this facility by the banks.
- The farmers who are KCC holders should have the option to take the benefit of insurance.
- Bank will not charge up to Rs. 3 lakh card limit as PPC/DOC etc.
- The revised Kisan Credit Card short-term limit earns interest at the SB interest rate for the credit balance.
- Bank will not charge up to Rs. 3 lakh card limit as PPC/DOC etc.
The introduction of the Revised Kisan credit card scheme has benefitted the farmers. In India, the condition of farmers has not improved much even today. But the scheme of the Revised Kisan credit cards has helped Indian farmers financially and technically.
- Low-interest rate
- Simple disbursement procedure
- Removes strictness regarding cash
- Help to purchase seeds and fertilizers at the farmer’s suitable.
- Helps to purchase crops and equipment on a cash avail discount from dealers
- 3-year credit facility– no required for seasonal evaluation
- The maximum loan amount limit is totally based on agricultural income
- Repayment after harvest.
- Margin, security, and documentation norms as appropriate to agricultural proceed
- Entrance to sufficient and timely credit for farmers
Salient features scheme
- Farmers who are eligible can be easily used a Revised Kisan credit card and a passbook
- Spinning cash credit facility including unlimited draws and repayments.
- According to operational land holding, the scale of finance and cropping pattern limit has been fixed.
- Farmers holding KCC should have the option of availing of insurance benefits.
- Bank will not levy charges by way of PPC/DOC etc., up to the card limit of Rs.3 lacs.
- At the tact of the banks, the sub-limits are fixed to cover short-term, medium-term as well as long-term loans.
- The credit card will only be valid for 5 years. If the performance is good an incentive will provide an addition to the credit limit.
- The incentive is to be provided to take care of cost raising, changes in cropping patterns, etc.
- If there is any loss of crops due to natural calamities, changing of loan is also permitted.
- Operations can be issued by branches ( and in the case of cooperative banks it can be from primary agricultural credit societies).
- Withdrawals using cheques attended by a card and passbook.
Contents of Credit Card
Requirements of documents to get KCC
- Signed in and duly filled out an application form.
- Identification proof (Aadhaar card, PAN card, voter ID, and driving licence)
- Address proof (Aadhaar card, PAN card, voter ID, and driving licence)
- Certificate of land
- A passport-size identification photograph
- Other documents (security PDC).
Personal Accident Insurance Scheme -Salient features
The risk of death and permanent disability by an accident is covered by the Revised Kisan credit card scheme. The coverage is 50000/- for death and permanent disability or in case of loss of 2 limbs, and 2 eyes by accident. And 25000/- for partial disability (loss of one limb and one eye).
- Premium is Rs.15/- for a one-year policy and Rs.45/- for a 3-year of policy.
- The nominated insurance company will propose one office at the district level. It will be considered a nodal office.
- The coverage is available only from the date of receipt of the premium for the insurance company.
- Make sure to include the nominee’s name in the Bank Kisan Credit Card-cum-Pass Book.
- A simplified claim settlement procedure has been developed under the scheme. The following professionals will be managing the procedure:-
- Commercial banks, small finance banks, RRBs, and cooperative banks implement the Revised Kisan credit card
- The lead bank officer
- Insurance representative company
It certifies the nature of death/disability by an accident, and it settles the insurance claims.
RuPay Kisan Credit Cards
The Rupay card is provided to the KCC holders. The Ministry of Agriculture has taken the drive to provide loans to the farmers. To provide timely credit support to the farmers, this scheme was inaugurated.