In order to get credit and financing, rural customers, including farmers, must visit a bank branch with documents proving the ownership of the land. The turnaround time (TAT), which ranges from two to four weeks from loan application to disbursement, has also been significantly longer.
who is eligible
According to reserve Bank of IndiaMaster Circular on Farmer Credit Card Scheme, these are the entities eligible for KCC:
I. Farmers – Individual/Joint borrowers who are owner farmers;
ii. Tenant farmers, oral lessees and sharecroppers;
iii. Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant farmers, sharecroppers etc.
Features of Kisan Credit Card
The major features listed on the following are: State Bank Of India Bank’s website.
type of facility: Revolving Cash Credit Account. The balance in the account, if any, will attract interest at the savings bank rate.
loan amount: Need based finance considering cropping pattern, area and scale of finance (SOF).
gap: Blue
Stop: He
Return: Repayment period as per crop period (short/long) and marketing period for the crop.
Security:
MainHypothecation of crops/properties to be raised with bank finance.
collateralEquity mortgage/registered mortgage of land/immovable property, as applicable 100% of the loan value. However, collateral exemption is given for KCC limit up to Rs. 1.60 lakh and up to Rs.3 lakh, in case of tie up arrangement.
Interest Subvention: Rs. 3.00 lakhs.
tenure: 5 years, subject to annual review, with 10% annual increase in the limit every year.
RuPay Debit Card for all eligible KCC borrowers.
Insurance:
One. Eligible crops can be covered under Pradhan Mantri Fasal Bima Yojana (PMFBY) on premium payment.
b. The borrower should opt for personal accident insurance, health insurance (wherever applicable).
Benefits of applying for Kisan Credit Card
according to HDFC bank Website, these are the advantages
· Passbook issued for cash withdrawal from the bank.
Check book issued with a credit limit of Rs 25,000.
Farmer can buy seeds, fertilizers, farm equipment with loan amount.
Low bank interest rates, on average around 9%.
Maximum credit limit of Rs 3 lakh.
Higher credit limit for farmers with good credit score.
Subsidy on interest rates to farmers with good credit scores.
How to apply for Kisan Credit Card
Interested persons should visit the bank and fill the required application along with other details. According to HDFC Bank, “Before the approval, the bank will check the credit score of the applicant. The bank will also check the applicant’s land holdings, cropping pattern, income etc.
digitization of kisan credit card
A pilot project for end-to-end digitization of Kisan Credit Card (KCC) loans is being implemented by Reserve Bank Innovation Hub (RBIH) in partnership with RBI as part of this initiative.
As per RBI’s press release, “The pilot project will involve automation of various processes within banks and integration of their systems with service providers. The proposed digitization of the KCC lending process will make it more efficient, cost-effective for borrowers.” and significantly reduce TAT.
with Union Bank of India And federal bankThe pilot launch will take place in September 2022 in some districts of Madhya Pradesh and Tamil Nadu, respectively, as partner banks and with the active cooperation of state governments. Based on the lessons learned from the pilot, the digitization of KCC loans will eventually be extended to additional districts in these two states.