Kisan Credit Card Scheme (KCC) provide short-term credit to the Farmers. This topic covers the Benefits, Objective, Advantages of the scheme, and the Salient features of the scheme.
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The objective of Kisan Credit Card Scheme
The revised Kisan Credit Card Scheme aims at providing adequate and timely cred for the comprehensive credit requirements of farmers under a single window for their cultivation and other needs as given below:
meet the short term credit requirements for the cultivation of crops.
- Post-harvest expenses
- Produce Marketing loan
- Consumption requirements of farmer household
- Working money to maintain farm assets, activities allied to agriculture, like dairy animals, and working required for floriculture, horticulture
- Investment credit needs for agriculture and allied activities like dairy animals, pump sets, floriculture, horticulture etc
- Short term credit requires rearing animals, birds, fish, shrimp, other aquatic organisms, and fish capture.
Eligibility for the Scheme
- All farmers-individuals who are owner cultivators.
- Eligible for Tenant farmers, Oral lessees and Share Croppers etc.
- Groups of farmers, including tenant farmers, sharecroppers etc.
- The criteria for beneficiaries under KCC for Animal Husbandry and Fisheries is given below.
- Aquaculture and Inland Fisheries – Fishers, Fish Farmers (individual/tenant farmers &groups/ partners), Self Help Groups, Joint Liability Groups and women groups. The beneficiaries must own or lease any fisheries-related activities such as pond, tank, open water bodies, raceway, hatchery, rearing unit, possess the necessary license for fish farming, and other State-specific fisheries and allied activities.
- Marine Fisheries – Beneficiaries listed, who own or lease registered fishing vessel, possess necessary fishing permission for fishing in waterway and sea, fish farming activities in estuaries, and other State-specific fisheries and allied activities in fishing.
- Poultry and small ruminant – Farmers, poultry farmers either an individual, Self Help Groups including tenant farmer of sheep/goats/pigs/ birds /rabbit and having owned/leased sheds.
- Dairy – Dairy farmers and Farmers and, either individual/ joint borrower, Joint Liability Groups including tenant farmers having owned /rented/leased sheds.
Besides the mandatory crop insurance, the Kisan Credit Card holder should have the option to take benefit of any Assets Insurance, Accident Insurance (including PAIS), and Health Insurance (wherever the product is available) and have premium paid through his Kisan Credit Card account. Premium has to be borne by farmers or bank according to the terms of the scheme. Farmer beneficiaries should be made well informed of the insurance cover available. Their consent (except in the case of crop insurance) is to be obtained at the application stage itself.
Interest Subvention for prompt repayment as advised by Government of India and State Governments. The bankers will make the farmers aware of this facility.
One time documentation at the time of the first Availment and after that simple declaration (about crops raised/proposed) by the farmer from the second year onwards.
Advantages of the Kisan Credit Card Scheme
- Simplifies disbursal procedures
- Removes rigidity regarding cash
- There is noneed to apply for a loan for every crop
- The assured availability of credit at any time, enabling reduced interest burden for the farmer.
- Helps buy seeds, fertilisers at farmer’s convenience and choice
- Helps buy on a cash-avail discount from dealers
- Credit facility for three years and no need for seasonal appraisal
- Maximum credit limit based on agriculture income
- Any number of withdrawals subject to the credit limit
- Repayment only after harvest of the crop
- Rate of Interest is low
- Security margin and documentation norms as possible to agricultural advance
- Timely credit to farmers
- The Full year’s credit requirement of the borrower taken care of Minimum paperwork and simplification of documentation for withdrawing funds from the Bank.
- Flexibility to draw cash and buy inputs from the store.
- Assured availability of credit at any time, low interest burden for the farmer. The flexibility of drawers from a branch of bank other than the issuing branch of bank at the discretion of the Bank.
Salient features Scheme
- Eligible farmers are provided with a Kisan Credit Card and a passbook or card-cum-pass book.
- Revolving cash credit facility involving the number of drawers and repayments within the limit.
- Limit to be fixed based on operational land holding, cropping pattern and scale of finance.
- Entire production credit needs for full-year plus ancillary activities related to crop production to be considered while fixing the limit.
- Sub-limits to cover short term, medium term, and term credit are fixed at the discretion of banks.
- Card valid for five years subject to annual review. As an incentive for good performance, credit limits could be enhanced to increase costs, change in cropping pattern, etc.
- Conversion of loans is also practicable in case of damage to crops due to natural calamities.
- Credit will be issued to the security, margin, rate of interest, etc., as per RBI norms.
- Operations may be through issuing branch (and PACS in the case of Cooperative Banks) through other designated branches at the Bank’s discretion.
- Withdrawals through cheques possible by card and passbook.
- Crop loans disbursed under Kisan Credit Card Scheme for notified crops are covered under Crop Insurance Scheme to protect the farmer’s interest against loss of crop yield caused by the natural calamities, pest attacks etc.