Details

The Kisan Credit Card (KCC) scheme is a vital initiative by the Indian government designed to support farmers by ensuring they have access to timely and adequate credit for their farming operations.

What is the Kisan Credit Card Scheme?

Introduced in 1998, the KCC scheme allows banks to issue credit cards to farmers. These cards are based on the farmer's land holdings and serve as a convenient tool for readily purchasing agricultural inputs like seeds, fertilizers, and other essential materials, as well as drawing cash for day-to-day production expenses.

Who Can Benefit From This Scheme?

The KCC scheme is primarily for individual farmers, joint borrowers who own land, tenant farmers, oral lessees, share croppers, and even Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) that include tenant farmers and share croppers.

Why This Scheme Is Important

The KCC scheme is crucial because it simplifies access to credit for farmers. It helps them manage their finances efficiently, meet short-term needs for crop cultivation, cover post-harvest expenses, finance produce marketing, and even manage household consumption needs. It also supports working capital for farm assets and investments in agriculture and allied activities. The government further supports farmers by providing interest subvention and prompt repayment incentives, making credit significantly more affordable.

Objective

The Kisan Credit Card (KCC) scheme, launched in 1998, helps farmers access timely credit for purchasing agricultural inputs and meeting production needs by issuing credit cards based on their land holdings.

Benefits

Fixation of credit limit/Loan amount

The short-term limit to arrive for the first year: For farmers raising a single crop in a year:Scale of finance for the crop (as decided by District Level Technical Committee) x Extent of area cultivated + 10% of limit towards post-harvest / household/consumption requirements + 20% of limit towards repairs and maintenance expenses of farm assets + crop insurance, PAIS & asset insurance.

Limit for second & subsequent year: First-year limit for crop cultivation purposes arrived at as above plus 10% of the limit towards cost escalation/increase in the scale of finance for every successive year ( 2nd, 3rd, 4th and 5th year) and estimated Term loan component for the tenure of Kisan Credit Card, i.e., five years.

For farmers raising more than one cropin a year, the limit is to be fixed as above depending upon the crops cultivated as per the proposed cropping pattern for the first year and an additional 10% of the limit towards cost escalation/increase in the scale of finance for every successive year (2nd, 3rd, 4th and 5th year). It is assumed that the farmer adopts the same cropping pattern for the remaining four years also. In case the cropping pattern adopted by the farmer is changed in the subsequent year, the limit may be reworked.

Term loans for investmentstowards land development, minor irrigation, purchase of farm equipment and allied agricultural activities. The banks may fix the quantum of credit for the term and working capital limit for agricultural and allied activities, etc., based on the unit cost of the asset/s proposed to be acquired by the farmer, the allied activities already being undertaken on the farm, the bank’s judgment on repayment capacity vis-a-vis total loan burden devolving on the farmer, including existing loan obligations.

The long-term loan limitis based on the proposed investments during the five-year period and the bank’s perception of the repaying capacity of the farmer

Maximum Permissible Limit: The short-term loan limit arrived for the 5th year plus the estimated long-term loan requirement will be the Maximum Permissible Limit (MPL) and treated as the Kisan Credit Card Limit.

Fixation of Sub-limits for other than Marginal Farmers:

Short-termloans and term loans are governed by different interest rates. Besides, at present, short-term crop loans are covered under Interest Subvention Scheme/ Prompt Repayment Incentive scheme. Further, repayment schedules and norms are different for short-term and term loans. Hence, in order to have operational and accounting convenience, the card limit is to be bifurcated into separate sub-limits for short-term cash credit limit cum savings account and term loans.

The drawing limitfor short-term cash credit should be fixed based on the cropping pattern and the amounts for crop production, repairs and maintenance of farm assets and consumption may be allowed to be drawn at the convenience of the farmer. In case the revision of the scale of finance for any year by the district-level committee exceeds the notional hike of 10% contemplated while fixing the five-year limit, a revised drawable limit may be fixed and the farmer is advised about the same. In case such revisions require the card limit itself to be enhanced (4th or 5th year), the same may be done and the farmer be so advised. For term loans, instalments may be allowed to be withdrawn based on the nature of the investment and the repayment schedule drawn as per the economic life of the proposed investments. It is to be ensured that at any point in time, the total liability should be within the drawing limit of the concerned year.

Wherever the card limit/liability so arrived warrants additional security, the banks may take suitable collateral as per their policy.

Sources and references

Details-1

Who Can Apply for a KCC?

Individual farmers or joint borrowers who own cultivable land.
Tenant farmers, oral lessees, and share croppers.
Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) comprising farmers, including tenant farmers and share croppers.

How to Apply for Your KCC

To apply for a Kisan Credit Card, you need to follow these steps:

Obtain the application form from your nearest bank branch (any commercial bank, Regional Rural Bank, or Cooperative Bank).
Fill out the application form completely with accurate details.
Submit the form along with all the required documents to the bank.
The bank will process your application and, upon approval, issue you a Kisan Credit Card.

Note: While the process is largely standardized, banks may have minor variations. It's advisable to visit your bank for the most current information.

Documents You'll Need

Completed Application Form.
Two recent passport-sized photographs.
Identity Proof (e.g., Aadhaar Card, Voter ID, Driving License, Passport).
Address Proof (e.g., Aadhaar Card, Driving License, Voter ID).
Proof of landholding, certified by the revenue authorities.
Details of the cropping pattern (crops grown) and acreage cultivated.
Security documents, if required for loan limits above Rs. 1.60 lakh or Rs. 3.00 lakh, as per the bank's policy.
Any other documents as specified by the sanctioning authority.

FAQ’s

What's the general validity period for a Kisan Credit Card?

A Kisan Credit Card is typically valid for 5 years. The exact tenure can vary depending on the specific activity you plan to finance with the card.

What is the age limit to apply for a KCC?

Applicants should be at least 18 years old and not more than 75 years old. If you are a senior citizen (above 60 years), you must have a co-borrower who is a legal heir.

How does the government help reduce the cost of credit under KCC?

The Indian government offers an interest subvention of 2% and a prompt repayment incentive of 3% on KCC loans. This applies to an overall limit of Rs. 3 lakh per annum and up to Rs. 2 lakh per farmer for activities solely related to animal husbandry and/or fisheries.

What types of financial support are available through the KCC scheme?

The scheme provides access to both Kisan Credit Cards for short-term credit needs and Term Loans for longer-term investments.

What kind of security is needed for KCC loans?

For limits up to Rs. 1.60 lakh (or Rs. 3 lakh if tied up), security usually involves the hypothecation of crops. For limits exceeding these amounts, banks may require additional security such as a mortgage of land or a third-party guarantee, along with crop hypothecation or asset hypothecation.

What is the interest rate for KCC loans?

While banks decide the specific interest rate, the KCC circular dated April 20, 2012, mentions an interest rate of 7% per annum on short-term credit, with an upper limit of Rs. 3 lakh on the principal amount.

Kisan Credit Card 2026