How to apply for Kisan Credit Cards and how it works?
June 10, 2019
What is Kisan Credit Card? Read on to find out about this government launched scheme.
The Kisan Credit Card Loan was launched in August 1998, by the Indian Government as a helpful hand to our country’s farmers. The goal of the Kisan Credit Card scheme was to ensure that Indian farmers had affordable access to short-term credit. Farmers are always in need of short term credit since they require funds for crop cultivation, harvesting and maintenance of their farms.
Objective of the Kisan Credit Card Loan
It was not unusual that farmers had to rely on non-institutional money lenders when it came to credit. Taking a loan from banks was a long and tedious process and thus farmers resorted to trusting local money lender, who in turn exploited them with exorbitant interest rates. Hence, the Kisan Credit Card (KCC) Loan was born. It allowed farmers to avail of quick loans with great accessibility and less paperwork without much hassles.
KCC benefits and features:
- Farmers will be issued an ATM-cum-Debit Card for withdrawal of funds from ATMs in addition to the KCC.
- The KCC Loan involves the facility of revolving credit for withdrawals and repayments within the credit limit. All repayments, however, have to be done within 12 months.
- Every year, the issuing bank will review the loan and decide the validity of the existing Credit Card.
- Individuals and joint owners of agricultural land are eligible to apply for KCC Loan.
- Tenants who have taken up rented land for cultivation are also eligible for KCC.
- The land in question must be agriculturally active and must be generating a crop.
- Applicant age shall be between 18 and 60 years at the time of applying.
Documents required for KCC Loan
The following basic documents are required to apply for the KCC scheme. However, the specific document requirement depends on the internal guidelines of the loan issuing bank and is subject to change for different banks.
- The KCC Loan application form, duly filled and signed by the applicant.
- Identity proof like Aadhaar Card, PAN Card, Voter’s ID Card, etc.
- Address proof specifying the applicant’s current address.
- Land ownership documents or rent agreement.
- Passport size photographs.
How to apply for KCC Loan?
Applying for a KCC Loan is extremely easy. Applicants can directly avail of the loan by approaching any branch of the bank they wish with the required documents. Applicants may also apply for the KCC online by visiting the website of the bank of their choice. All supporting banks have KCC application facility on their website and applicants may use the same.
Interest rate and Credit limit
It is up to the banks to decide the KCC interest rate, which shall be in accordance with Reserve Bank of India (RBI) guidelines. However, one can use a KCC interest rate calculator available on various bank websites to calculate the interest rate. Similarly, the KCC limit is also set by the concerned bank.
Hence, the KCC Loan scheme is a highly beneficial loan scheme for farmers in India. The hassle-free disbursement and flexible repayment option is very convenient for farmers and ensures that farmers can smoothly carry out crop cultivation and harvesting. The farmers can also use their loans to purchase seeds and fertilisers, thus allowing farmers to stay away from exploitative and non-institutional money lenders.
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