How To Apply For Kisan Credit Card Online: Credit Support For The Farmers
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6 June 2022
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6 June 2022Introduced by the Government of India in 1998, the Kisan Credit Card (KCC) scheme aims to provide short-term credit support to the farmers for their cultivation requirements and non-farming activities. This special provision allows farmers to avail low-interest funding from financial institutions.
The National Bank for Agriculture and Rural Development recommends this scheme to manage debt traps. This scheme is also known as Pradhan Mantri Kisan Credit Card Yojana. These credit cards are extended by commercial, state co-operative and regional rural financial institutions. Read on to know the benefits, eligibility, documents required and how to apply for a Kisan Credit Card.
Table of contents
What is a Kisan Credit Card?
The Kisan Credit Card scheme is a short-term credit provided to the farmers in India to reduce the financial burden during agricultural production and maintenance. The credit limit of this scheme is determined on the basis of cultivated crops, maintenance expenses and finance margin. In the case of marginal farmers, a limit of Rs. 10,000 – Rs. 50,000 is offered. This specialized credit facility is beneficial for the farmers, especially when backing their farming business.
Benefits of a Kisan Credit Card
The availability of PM Kisan Credit Card scheme is excused from the high-interest rate of traditional loans extended by various financial institutions as the interest rate for this scheme starts at 2% and averages at 4%. Moreover, with the benefit of this scheme, farmers can conveniently repay the loans based on the harvesting span of the crop for which the credit was provided.
Here are some of the necessary benefits of the Kisan Credit Card:
- Farmers will receive a credit card cum ATM card that can be utilized to withdraw funds from the ATM.
- This Kisan Credit Card scheme comes with a flexible repayment period of 12 months, allowing farmers to clear off their debt comfortably.
- The overall limit of this credit card can increase every year after a yearly review. Farmers having a good repayment history are eligible to get incentives with a substantial credit limit to manage inflation.
- Moreover, this scheme allows farmers to reschedule or convert repayment if the crops are damaged due to natural calamity or any untoward incident. The repayment policy allows farmers to pay off the debt only after the successful completion of the harvest.
- The interest rate of this credit card loan scheme is similar to other advances from the agriculture segment. Besides, this credit facility comes with a validity of three years without any requirement of seasonal appraisal.
- Another significant benefit of the Kisan Credit Card scheme is accident insurance. The beneficiaries are covered against financial losses up to an amount of Rs. 50,000 against death, permanent disability etc. They are required to pay the premium of Rs. 15 for a one-year policy and Rs. 45 for a three-year plan.
- This scheme comes with a simplified application process and documentation, which reduces the hassle and saves time.
Eligibility Criteria for Kisan Credit Card
This scheme is available for both communal and individual farmers involving marine fishermen, poultry or small ruminant owners, women groups, fish farmers etc. Its accessibility and easy-going terms make it an attainable option for individuals.
Here is the Kisan Credit Card eligibility parameters and one needs to fall under the following categories to enjoy the benefits of this scheme:
- Any farmer who is an owner-cultivator.
- Tenant farmers, oral lessee and sharecroppers can apply for this scheme.
- Joint liability groups of sharecroppers, tenant farmers and self-help groups are eligible for this scheme.
- Individuals who are joint borrowers and belong to a certain group. Additionally, they need to be owner-cultivators.
- Farmers engaged in crop production or associated activities such as animal husbandry and non-farm activities.
Documents Required for Kisan Credit Card
To apply for any credit option, it is mandatory to submit all the essential documents, which will make the approval process prompt and hassle-free. Following are some necessary Kisan Credit Card documents that the applicants need to submit to the concerned financial institution:
- KYC documents
- Applicant’s passport-size photograph
- Duly filled and signed application form
- Land documents
- Valid residential proof
- Associated documents such as security PDC, requested by the concerned financial institution
How to Apply for a Kisan Credit Card?
The application process of this scheme can be done through both online and offline modes. To apply for Kisan Credit Card online, follow the step-wise guide discussed below:
Step 1: Visit your preferred financial lender’s website and select Kisan Credit Card option from the list.
Step 2: On selecting the ‘apply’ option, you will be redirected to an application page
Step 3: Now, fill out the application form and click on ‘submit’. An application number will be sent for reference. Note this reference number and wait for application processing
After thorough verification of the submitted documents, one can receive their Kisan Credit Card within a few days.
Also Read: What Is The Difference Between Credit Card And Debit Card?
List of Banks Offering PM Kisan Credit Card
The interest rate of the Kisan Credit Card scheme varies depending on the loan amount and the concerned financial institution. To comprehend better, take a look at the list, which includes the top financial institutions that extend this scheme and their applicable interest rate:
- State Bank of India – The interest rate for a certain loan amount in this scheme starts at a minimum of 7% p.a. If the loan amount exceeds, the interest rate will vary.
- HDFC Bank – This financial institution extends the loan amount against a minimum interest rate starting at 7.22% p.a.
- UCO Bank – Interest rate offered by this financial institution starts at a minimum of 7% p.a.
- Punjab National Bank – The interest rate starts at 7% p.a. against a certain loan amount.
- Indian Overseas Bank – Interest rate levied by this financial institution starts at 7% p.a.
- Bank of Maharashtra – For a certain loan amount, the interest rate starts at a minimum of 7% p.a.
- UCO Bank – The interest rate for a specified loan amount starts at 7% p.a.
Note: In the above list, the minimum interest rate offered by the financial institutions is mentioned. However, it will vary based on the loan amount and other associated factors.
Also Read: Personal Loan vs Credit Card: Which One Should You Opt For
Final Word
Thus, with the help of Kisan Credit Card scheme, farmers can conveniently meet their credit requirements during crop season. This credit delivery mechanism extends adequate and timely credit to the applicants from a listed financial institution under a single window. This beneficial scheme significantly reduces the dependency of the farmers on informal financial institutions for availing of credit.
FAQs on Kisan Credit Card
Ans: To help farmers meet their working capital requirements, certain financial institutions extend crop loans. The Kisan Credit Card scheme is one type of crop loan for farmers. Apart from meeting working capital requirements, one can use such credit options to meet various other purposes.
Ans: The applicable interest rate will depend on the concerned financial institution. However, according to the KCC circular dated 20th April 2022, the interest rate starts at a minimum of 7% p.a. on short-term credit with a loan amount of Rs.3 lakh.
Ans: The limit extended under this scheme for initial years relies on –
– Expenses associated to maintain crop insurance, personal accident insurance scheme, farm assets etc.
– Crop cultivation as per finance growth and pattern of harvest
– Post-harvest requirements
Ans: Applicants can apply for the Kisan Credit Card scheme by visiting their preferred financial institution’s website or by downloading the application form from the website as well. Then, with the assistance of a bank representative, an applicant can visit the branch and proceed with the application process. After completing the formalities, the loan officer will assist the applicant with the loan amount.
Ans: To learn about the credit balance of KCC accounts, applicants need to connect with the customer service department of the concerned financial institution. Alternatively, one can visit the branch and check the account balance.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
