Kisan Credit Card (KCC): Features, Benefits, and Application Process

The Kisan Credit Card (KCC) scheme was introduced to provide adequate and timely credit support to farmers for their agricultural operations, post-harvest expenses, produce marketing, consumption needs, working capital for farm asset maintenance, and even investment in allied activities. The scheme simplifies the credit process through a single-window approach, ensuring that farmers have flexible access to credit at highly subsidized interest rates.

Key Features and Benefits

Subsidized Interest Rate:
The government provides an interest subvention of 2% and a prompt repayment incentive of 3%, making the effective annual interest rate as low as 4%.
Flexible Loan Structure:
- Short-term Credit:
  The first-year limit is calculated based on the scale of finance determined by the District Level Technical Committee for a single crop, plus additional amounts for post-harvest, maintenance, and insurance.
- Subsequent Years:
  For the second year onward, an additional 10% is added each year to account for cost escalation, and the farmer may also avail a term loan component for long-term investments.
- Maximum Permissible Limit (MPL):
  The MPL is the sum of the short-term loan limit for the 5th year and the estimated term loan requirement.
Bifurcation of Limits:
The KCC limit is divided into:
- Short-term cash credit limit (for crop production, repairs, maintenance, etc.)
- Term loan limit (for investments like land development, irrigation, farm equipment, etc.)
Collateral Requirements:
Banks may secure additional collateral if the loan amount exceeds certain thresholds.
Delivery Channels:
KCCs can be used via various channels, including:
- ATMs / Micro ATMs
- Business Correspondents (BCs) using smart cards
- Point of Sale (PoS) machines at input dealers
- Mobile Banking with IMPS capabilities / IVR
- Aadhaar-enabled cards

Types of Cards

Banks can issue different versions of the Kisan Credit Card:

Magnetic Stripe Cards with PIN:
Standard cards that are compatible with all bank ATMs and micro ATMs.
Biometric/UIDAI-Enabled Cards:
For banks that wish to integrate biometric authentication through UIDAI.
EMV/Rupay Chip Cards:
These provide enhanced security and may incorporate both magnetic stripes and PIN features.

Eligibility

Who Can Apply:
- Farmers (individuals or joint borrowers) who are owner cultivators, tenant farmers, oral lessees, share croppers.
- Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers.
Additional Requirements:
- Proof of landholding (certified by revenue authorities).
- Relevant documents related to cropping pattern, as well as any collateral for higher loan limits if required.

Application Process

Modes: Online and Offline

Online:
1. Visit the website of the bank where you wish to apply for KCC.
2. Select the “Kisan Credit Card” option.
3. Complete the application form with required details and submit it.
4. A reference number will be issued, and the bank will contact you within 3-4 working days if you meet the eligibility.
Offline:
Visit your bank branch, fill out the KCC application form, attach the required documents, and submit the form at the branch.

Documents Required

Completed application form.
Two passport-sized photographs.
Identity proof (e.g., Driving License, Aadhaar Card, Voter Identity Card, or Passport).
Address proof (e.g., Aadhaar Card, Driving License).
Proof of landholding (certified by revenue authorities).
Details of cropping pattern (crops grown and acreage).
Security documents for loan limits above prescribed thresholds (as applicable).
Any additional documents as per the bank’s sanction.

Frequently Asked Questions (FAQs)

What is the validity period of the Kisan Credit Card?
The card is typically valid for a period as determined by the issuing bank, often linked to the crop cycle or a fixed period.
What is the age requirement for applying?
There is no specific age limit mentioned; eligibility is based on being a qualified farmer with landholding and agricultural operations.
What is the interest rate on the KCC?
With interest subvention and prompt repayment incentives, the effective rate can be as low as 4% per annum.
What facilities does the KCC provide?
The KCC provides both short-term credit for operational needs and term loans for investment in farm development, including separate sub-limits.
What are the security norms?
Banks may require collateral if the loan amount exceeds certain limits; separate books of account for R&D expenditures are maintained.
What government benefits support KCC?
The Government of India provides interest subvention of 2% and a prompt repayment incentive of 3%, among other benefits.