KCC or the Kisan Credit Card is a system designed to deliver credit to the farmers that enables them to function efficiently. The KCC scheme was first launched in 1988 by the NABARD and Reserve Bank of India. One of the important things about this card is that it is available and offered by most of the rural banks, cooperative banks, and Public sector banks.
The main aim of the card is to reduce the farmer’s dependence on unconventional banking which, in turn, sucks the farmers into heavy debt and losses.
Features of the KCC
- Provides credit to fulfill farmer’s financial requirements for agriculture and other related activities
- Insurance for the cardholder
- Insurance coverage on certain crops that comes under the KCC scheme
- Insurance against any crop loss due to natural calamities, pest attacks etc.
- Farmers who own agricultural land or cultivated land
- Farmers who have rented or leased land for agriculture
- Self Help Group of farmers, Joint Liability groups that include sharecroppers, tenant farmers etc.
These are the few features of the KCC. However, there are many benefits of having n Kisan Credit Card
- Easy and flexible repayment options
- Assist on the purchase of agricultural goods
- Credit card limit depends entirely on agricultural income
- Hassle free disbursement
- Comparatively lower interest rates than other credit cards
- Avails discount from dealers and merchants
- Credit is automatically made available annually depending on the farmer’s agricultural expenses and key requirements
- The credit is available for at least 3 years with absolutely no seasonal appraisals
- The farmer has to repay the loan only after the end of harvesting season.
- Minimal documentation
- Credit can be withdrawn from any bank branch as per RBI and banks discretion.
Common and top banks that provide KCC today
- State Bank of India
- IDBI Bank
- National Payments Corporation of India
Interest rate and repayment on the credit provided
- The actual rate of interest will be decided by the bank, however, the common trend is between 6-9% per annum
- The repayment period of the credit or loan is fixed by the bank on the basis of harvesting and the marketing period prevalent in the region.
How to use KCC
- Famers with a credit limit higher than INR 25000 can avail a chequebook, which can be used for withdrawal
- Farmers can use Credit cards for withdrawal
- Through withdrawal slips
How to avail a KCC
The procedure to avail a KCC is pretty simple. The farmer or the landholder should visit a bank and place their request. The bank will check the details of the land owned and the income generated from this land; along with this, the applicant farmer should also possess a good credit history. If the bank finds that the applicant fulfills this eligibility criterion, the KCC is issued. However, the interest rates, repayment mode, and the credit limit will be set by the bank within the guidelines issued by the Reserve Bank of India.