Kisan Credit Card

The Kisan Credit Card (KCC) scheme was introduced in 1998 to issue Kisan Credit Cards to farmers on the basis of their holdings for uniform adoption by the banks 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. The scheme was further revisited in 2012 by a Working Group under the Chairmanship of Shri T. M. Bhasin, CMD, Indian Bank with a view to simplify the scheme and facilitate the issue of Electronic Kisan Credit Cards. The scheme provides broad guidelines to banks for operationalizing the KCC scheme. Implementing banks will have the discretion to adopt the same to suit institution/location-specific requirements.

Objective

• Kisan Credit Card Scheme aims at providing need-based and timely credit support to the farmers for their cultivation needs as well as non-farm activities and cost-effective manner.
• To bring about flexibility and operational freedom in credit utilization.

Eligibility

• Under the scheme, Branches 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.

Issue of cards

• 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 the recording of the transactions on an ongoing basis. The passbook, among others, would provide for a passport size photograph of the beneficiary.
• The beneficiary farmer should produce the passbook while operating the account.

Technical Feasibility

• Suitability of soil, climate, and availability of adequate irrigation facilities.
• Suitability of the product for storage.
• Suitability of the storage unit.

Financial Viability:

• The expected incremental income should be adequate to repay the advance leaving sufficient balance for farmer’s domestic needs.

Quantum of Finance and margin:

• For production / short-term purposes – The loan amount will depend upon the type of crop, the area under cultivation, and scale of finance.
  Short-term working capital – For ancillary activities and minor investments of medium-term nature.
• Short-term credit for the consumption / domestic needs to the extent of up to 25 percent of the gross estimated income of the farmer and a maximum of Rs.50,000/=.
• Finance against storage receipts/produce marketing may be considered a maximum of up to 50 percent of the price of the produce prevailing at the time of storage/sanction of loan. Limits/advances up to Rs.10 lakhs per farmer can be extended for a maximum period of 12 months. However, the amount of finance to the extent of the net of the loan may be made available to the farmer.
• Revolving Cash Credit – Annual Review. The farmer should be allowed for any number of drawls and repayment within the limit.
  The review may result in a continuation of the facility, enhancement of the limit, or cancellation of the limit/withdrawal of the facility, depending upon the performance of the borrower.
• The aggregate of credits into the account during the 12 months period should at least be equal to the maximum outstanding in the account.
• No drawal in the account should remain outstanding for more than 12 months in the case of normal crops and 18 months in the case of sugarcane and banana crops.
• 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 installments as per existing guidelines.
• As a measure of incentive for cardholders with good performance, the Branches may at the time of review, enhance the credit limit suitably to take care of increase in the cost of inputs/labor, change in cropping pattern, etc.