Kisan Credit Card (KCC)

 
1. Introduction
The Kisan Credit Card (KCC) scheme was introduced in 1998 for issue of Kisan Credit Cards to
farmers on the basis of their holdings
so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilizers,
pesticides etc. and draw cash for their production needs.
The scheme was further extended for the investment credit requirement of farmers viz. allied and
non-farm activities in the year 2004.
On 18 December, 2020,Prime Minister Narendra Modi launched Revised Scheme to Kisan
Credit Card(KCC) which aims at providing adequate and timely credit support from the banking
system under a single window to the farmers for their cultivation and other needs.
2. Objectives/ Purpose
Kisan Credit Card (KCC) scheme meets the financial requirements of farmers at various stages
of farming. 
The scheme aims at providing adequate and timely credit support from the banking system under
a single window with flexible and simplified procedure to the farmers for their cultivation and
other needs as indicated below:

 To meet the short-term credit requirements for cultivation of crops;

 Post-harvest expenses;
 Produce marketing loan;
 Consumption requirements of farmer household;
 Working capital for maintenance of farm assets and activities allied to agriculture;
 Investment credit requirement for agriculture and allied activities.

4. Beneficiaries:
small farmers
marginal farmers
share croppers
oral lessee and tenant farmers.
The Self Help Groups (SHGs) or Joint Liability Groups (JLGs)
 Steps taken to ensure ease of application:

 Simple one-page form has been developed such that the basic data would be obtained from the
bank’s record under PM KISAN and only a copy of the land record along with details of crop
sown would need to be filled in.
 The one-page form shall be available along with an advertisement being published in all leading
newspapers across the country and the same can be cut and filled by the beneficiaries.
 The form can also be downloaded from websites of all Scheduled Commercial Banks (SCBs) as
well as website of Department of Agriculture, Cooperation & Farmers Welfare, Govt. of India
(www.agricoop.gov.in) and PM-KISAN portal (www.pmkisan.gov.in).
 Common Service Centres (CSC) have also been authorized to fill up the form and transmit the
same to the concerned bank branches. 

5. Salient Features of Kisan Credit Card Scheme

 The KCC scheme provides the facility of ATM enabled RuPay Card,
 one-time documentation, built-in cost escalation in the limit
 any number of drawals within the limit.
 KCC covers post-harvest expenses, produce marketing loan, consumption requirements of
farmer household, working capital for maintenance of farm assets and activities allied to
agriculture, investment credit requirement for agriculture and allied activities.
 The Kisan Credit Card Scheme is implemented by Commercial Banks, RRBs, Small Finance
Banks and Cooperatives.

 
The credit limit under the Kisan Credit Card may be fixed as under:
All farmers other than marginal farmers[11]:

 The short term limit to be arrived for the first year (For cultivating single crop in a year):

Scale of finance for the crop (as decided by District Level Technical Committee) x Extent
of area cultivated + 10 per cent of limit towards post-harvest/household/ consumption
requirements + 20 per cent of limit towards repairs and maintenance expenses of farm
assets + crop insurance and/or accident insurance including PAIS, health insurance &
asset insurance.
 

 Limit for second & subsequent year

 First year limit for crop cultivation purpose arrived at as above plus 10 per ent of the limit
towards cost escalation / increase in scale of finance for every successive year (2nd, 3rd,
4th and 5th year) and estimated term loan component for the tenure of Kisan Credit Card,
i.e., five years. (Illustration I)
 

 For cultivating more than one crop in a year

The limit is to be fixed as above depending upon the crops cultivated as per proposed cropping
pattern for the first year plus an additional 10 per cent of the limit towards cost escalation /
increase in scale of finance for every successive year (2nd, 3rd, 4th and 5th year). It is assumed
that the farmer adopts the same cropping pattern for the succeeding four years. In case the
cropping pattern adopted by the farmer is changed in the subsequent year, the limit may be
reworked. (Illustration I)
 

 Term loan for investment

The term loan for investment is to be made towards land development, minor irrigation, purchase
of farm equipment and allied agricultural activities. The banks may fix the quantum of credit for
term and working capital limit for agricultural and allied activities, etc., based on the unit cost of
the asset/s proposed to be acquired by the farmer, the allied activities already being undertaken
on the farm, the bank's judgment on repayment capacity vis-a-vis total loan burden devolving on
the farmer, including existing loan obligations.
The long term loan limit should be based on the proposed investment(s) during the five-year
period and the bank's perception on the repaying capacity of the farmer.
 

 Maximum Permissible Limit

The short-term loan limit arrived for the 5th year plus the estimated long-term loan requirement
will be the Maximum Permissible Limit (MPL) and is to be treated as the Kisan Credit Card
limit.
 

 Fixation of Sub-limits
 Short-term loans and term loans are governed by different interest rates. At present, short term
crop loans up to ₹ 3 lakh are covered under Interest Subvention Scheme/Prompt Repayment
Incentive scheme of the Government of India 

 Drawing limit for short term cash credit should be fixed based on the cropping pattern. The
amount(s) for crop production, repair and maintenance of farm assets and consumption may be
allowed to be drawn as per the convenience of the farmer.
  

 For term loans, installments may be allowed to be withdrawn based on the nature of investment
and repayment schedule drawn as per the economic life of the proposed investments.

 For Marginal Farmers

A flexible limit of ₹ 10,000 to ₹ 50,000 may be provided (as Flexi KCC) based on the land
holding and crops grown including post-harvest warehouse storage related credit needs and
other farm expenses, consumption needs, etc., plus small term loan investment(s) like
purchase of farm equipment(s), establishing mini dairy/backyard poultry as per assessment of
the Branch Manager without relating it to the value of land. The composite KCC limit is to
be fixed for a period of five years on this basis. (Illustration II)
 
6. Achievements

 As part of the Atmanirbhar Bharat Package[12], the Government has announced to cover 2.5
crore farmers under the Kisan Credit Card (KCC) scheme with a credit boost of Rs. 2 lakh crores
through a special saturation drive.
 As a result of concerted and sustained efforts by the banks and other stakeholders in the direction
of providing access to concessional credit by the farmers, including Fishermen and Dairy
farmers, a major milestone target of covering more than 1.5 crore farmers under KCC, with
sanctioned credit limit of Rs.1.35 lakh crore has been achieved.
 Under the Kisan Credit Card (KCC) Scheme, a flexible limit of Rs 10,000 to Rs 50,000 has been
provided to marginal farmers[13] (as Flexi KCC) based on the land holding and crops grown
including post-harvest warehouse storage related credit needs and other farm expenses,
consumption needs, etc., plus small term loan investments without relating it to the value of land.

Click here[14]to see the State-wise progress of Kisan Credit Card Scheme.
 
7. Validity/Renewal

 Banks may determine the validity period of KCC[15] and its periodic review.
 The review may result in continuation of the facility, enhancement of limit or cancellation of the
limit/withdrawal of the facility depending upon increase in cropping area/pattern and
performance of the borrower.

Central Kisan Credit Card ( CKCC)

iOS-App
Purpose *To meet short term credit requirements for cultivation of crops/ dairy
animals/fisheries/poultry birds/other small ruminants.
*To provide Post-harvest expenses & Produce Marketing loans.
* To meet consumption requirement of farmers
* To meet working capital requirement for maintenance of farm equipments
and other assets and activities allied to agriculture like dairy, fisheries etc.

Eligibility *All Farmers - Individuals / Joint borrowers who are owner cultivators, tenant
farmers, oral lessees, share croppers and Self Help Groups or Joint Liability
Groups of Farmers, Farmers Producer organizations/ Farmers producer
Companies

Nature of *Short-term revolving credit

facility

Limit Cash Credit limit will be sanctioned for 5 years

*For the first year,

limit will be fixed on the basis of
- Scale of finance for the crop/ dairy animals etc, plus
- 10% of limit towards post-harvest/household/consumption expenses plus

- 20% of limit towards repairs & maintenance, crop insurance, Personal

Accident Insurance & asset insurance.
- For second and subsequent years the limit will be arrived at by adding 10%
towards cost escalation over limit of the preceding year.

Security *Primary -
- Hypothecation of crops/dairy animals/fisheries/poultry birds/other small
ruminants and other assets created out of bank's finance.
* Collateral -
- No collateral for limit upto Rs  1.60 Lakh.(In tie ups-up to Rs.3.00 Lakh- No
security required)
- For limits above Rs 1.60 Lakh, collateral security is required.

Rate of Limit Upto Rs 3,00,000/- (Interest 7%

Interest Subvention)
Above Rs 3.00 Lakh up to Rs 10.00 lacs
Above Rs 10.00 lakh upto Rs 100.0 lakh  

*MCLR + 2.50%
*MCLR + 3.00%
 

Interest 3% Prompt Repayment Incentive will be credited in CKCC accounts upto Rs.3
Subvention Lakhs of prompt repaying farmers so Net Interest rate on CKCC will be 4% for
farmers paying promptly.

Processing Upto 3 lakh-Nil

Charges
Above 3 lakh- 0.30%

Repayment *As per the anticipated harvesting and marketing of the crop.
*Limit will be valid for 5 years, subject to annual review.