Kisan Credit Card (KCC) Loan

The Kisan Credit Card or KCC scheme was introduced by the Government of India in 1998 for the issuance of Kisan Credit Cards to farmers based on their holdings for uniform adoption by the banks so that the farmers can use them for readily purchasing agriculture inputs, like seeds, fertilizers, pesticides, and so on and draw cash for their production needs.

The KCC card scheme was further extended in the year 2004 for the investment credit requirements of farmers, i.e. allied and non-farm activities. Now, the scheme provides broad guidelines to banks for operational listing the Kisan credit loan scheme.

KCC is provided like a revolving cash credit account. The credit balance in the KCC bank account, if available, will fetch interest at the Savings bank rate.

The KCC loan interest rate is decided as per the loan amount, prevailing MCLR, and guidelines of the lending bank. As of now, KCC loan interest rate 2021 for loans up to Rs. 3 Lakhs is 7% p.a.

• Purpose
  • Meeting short-term credit requirements for crop cultivation, dairy animals, fisheries, poultry birds, and other small ruminants.
  • Meeting post-harvest expenses and producing marketing loans.
  • Meeting consumption requirements of farmers.
  • Meeting working capital requirements for maintaining farm equipment and other assets & activities allied to agriculture (such as dairy, fisheries, etc).
• Insurance cover: 
  • Kisan card loan borrowers under the age of 70 years are covered under the Personal Accident Insurance Scheme (PAIS).
  • Eligible crops are covered under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
  • Accidental insurance cover of Rs. 1 Lakh is available for Rupay Card holders if the card is activated once in 45 days.
• RuPay card: RuPay cards are available for all eligible KCC borrowers.
• Repayment: The repayment tenure is decided as per the crop period and marketing period for the crop. The maximum tenure is 5 years, with a 10% annual increase limit each year, subject to annual review.
• Rate of interest: The KCC interest rate is decided as per bank guidelines. For example, the SBI Kisan credit card loan interest rate for loans up to Rs. 3 Lakhs is 7% p.a., and the SBI KCC loan interest rate for loans above Rs. 3 Lakhs is applicable from time to time. The interest rate for HDFC KCC loan is offered at an average of around 9% p.a.
• Interest subvention: Availability of 3% interest subvention for prompt borrowers for loans up to Rs. 3 Lakhs.
• Processing fees: Nil for loans up to Rs. 3 Lakhs and 0.30% for above Rs. 3 Lakhs.
• Limit:
  • KCC loan limit or cash credit limit is sanctioned for 5 years.
  • For the first year, the limit will be fixed based on the scale of finance for the produce/activity + 10% limit towards post-harvest/ household/ consumption expenses + 20% limit towards repairs & maintenance, personal accident insurance, asset insurance, and crop insurance.
  • For the second and subsequent years, the Kisan credit card loan limit will be decided by adding 10% toward cost escalation over the limit of the preceding year.
• Margin: Nil because it is built in the scale of finance.
• Security: Primary security as the hypothecation of crops, dairy animals, poultry birds, fisheries, other small ruminants & other assets created out of the bank's finance. In tie-ups up to Rs. 3 Lakhs, no security is required.
• Collateral: Nil for limits up to Rs. 1.60 Lakhs and collateral security for limits above Rs. 1.60 Lakhs.

The eligibility criteria for the PM Kisan loan are as follows:

• All farmers are eligible for the Kisan loan scheme, including the individuals/ joint borrowers who are owner cultivators
• Oral lessees, tenant farmers, and sharecroppers. 
• Self Help Groups (SHG) or Joint Liability Groups (JLG) of farmers, farmers producer organizations/ farmers producer companies.
• The applicant should be aged 18 to 75 years.

If you are looking for a KCC loan online apply with the following documents:

• Duly filled and signed application form.
• A copy of identity proof, like an Aadhaar card, Voter ID, PAN card, driving license, etc.
• A copy of current address proof, like an Aadhaar card, driving license, PAN card, or Voter ID.
• Land documents
• Passport-sized photograph of the applicant.
• Post-dated cheques (PDCs) and other documents as required by the lending bank.

• Kisan Credit Card Loan is available at many national, cooperative, and regional banks in India.
• Before sanctioning the loan, the lending bank will check the credit score of the applicant.
• The lending bank will also check the land holdings, income, crop pattern, etc. of the applicant.

Below are the application online and offline processes for the KCC loan application:

Online Process

• Visit the lending bank’s website where you want to apply for the loan.
• From the available options, select the Kisan Credit Card.
• Click on the ‘Apply’ option to let the website redirect you to the application page.
• Now fill in the form by entering the required details and click on the ‘Submit’ button.
• On applying, an application reference number will be sent to you.
• If you are considered eligible for the KCC scheme, the bank will contact you for the further process within a few working days.
• You can call the customer care team of the bank to check your PM Kisan loan status.

Offline Process

• You can apply for the KCC loan offline by visiting the branch of the lending bank of your choice. 
• You can also download the application form from the bank’s website. 
• You can visit the branch and initiate the application process with the help of a representative of the bank. 
• Once all the formalities are completed, the loan officer of the bank can help you with the loan amount.