Kisan Credit Card (KCC) Loan

Kisan Credit Card Loan or KCC loan is offered to all farmers to help them meet their short term credit requirements for agricultural activities. Under Kisan loan, a cash credit limit is offered for up to 5 years at interest rate starting from 7% p.a.

 Kisan Credit Card

The Kisan Credit Card or KCC scheme was introduced by 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 lising the kisan credit loan scheme. 

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

KCC Loan Interest 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.

Features of Kisan Credit Card Loan

  • Purpose
    • Meeting short-term credit requirements for crops cultivation, dairy animals, fisheries, poultry birds, and other small ruminants.
    • Meeting post-harvest expenses and produce marketing loans.
    • Meeting consumption requirements of farmers.
    • Meeting working capital requirements for maintaining farm equipments 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 Yojna (PMFBY).
    • Accidental insurance cover of Rs. 1 Lakh is available for Rupay Cards 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 10% annual increase of limit each year, subject to annual review.
  • Rate of interest: KCC interest rate is decided as per bank guidelines. For example, SBI kisan credit card loan interest rate for loans up to Rs. 3 Lakhs is 7% p.a. and SBI KCC loan interest rate for loans above Rs. 3 Lakhs is as 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 on the basis of 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 second and subsequent years, the kisan credit card loan limit will be decided by adding 10% towards cost escalation over the limit of the preceding year.
  • Margin: Nil because it is inbuilt in the scale of finance.
  • Security: Primary security as hypothecation of crops, dairy animals, poultry birds, fisheries, other small ruminants & other assets created out of bank's finance. In tie ups up to Rs. 3 Lakhs, no security is required.
  • Collateral: Nil for limit up to Rs. 1.60 Lakhs and collateral security for limits above Rs. 1.60 Lakhs.

Eligibility for Kisan Credit Card Loan

The eligibility criteria for 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 share croppers. 
  • 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.

Documents Required for KCC Loan

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

  • Duly filled and signed application form.
  • A copy of identity proof, like Aadhaar card, Voter ID, PAN card, driving license, etc.
  • A copy of current address proof, like Aadhaar card, driving license, PAN card, 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 Application

  • 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 land holdings, income, crop pattern, etc. of the applicant.

How to Apply for KCC Loan?

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 submitting the application, 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 the representative of the bank. 
  • Once all the formalities are completed, the loan officer of the bank can help you with the loan amount.

Kisan Credit Card (KCC) Loan FAQs

Who is eligible for a KCC loan?

  • All farmers - individuals/ joint borrowers who are owner cultivators
  • Oral lessees, tenant farmers, and share croppers. 
  • Self Help Groups (SHG) or Joint Liability Groups (JLG) of farmers, farmers producer organizations/ farmers producer companies.

What is the validity period of the Kisan Credit Card?

The validity period of the Kisan Credit Card is 5 years.

Where do Kisan credit cards be used?

  • Meeting short-term credit requirements for crops cultivation, dairy animals, fisheries, poultry birds, and other small ruminants.
  • Meeting post-harvest expenses and produce marketing loans.
  • Meeting consumption requirements of farmers.
  • Meeting working capital requirements for maintaining farm equipments and other assets & activities allied to agriculture (such as dairy, fisheries, etc).

What things are provided to farmers under the KCC scheme?

  • 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 Yojna (PMFBY).
  • Accidental insurance cover of Rs. 1 Lakh is available for Rupay Cards holders if the card is activated once in 45 days.
  • RuPay card is available for all eligible KCC borrowers.
  • Farmers can get a loan of up to Rs. 3 Lakhs and produce marketing loans.
  • Eligible farmers will get a savings account with an attractive interest rate and a smart card and a debit card along with the Kisan Credit Card.
  • Assistance for purchasing fertilizers, seeds, etc. and in availing cash discounts from merchants/ dealers.
  • The kisan credit card loan interest rate is very attractive.