Agriculture is the mainstay of 70% of the population with a contribution of 17% to Indian GDP. Yet today we witness an increased demand from food processing industries and the market from exports. India holds the second rank worldwide in agricultural production, with the ninth rank in farm exports. Agricultural exports are likely to increase at 3.9% in 2022-2023. There is a lot of demand for agricultural inputs such as hybrid seeds, fertilizers, and allied services like warehousing and cold storage for agricultural production. There is a great demand for credit facilities and financial assistance in the farm sector to manage agricultural production. PM Kisan offers many schemes for the benefit of the farmers, including access to credit, annual income etc.
Introduction of Kisan Credit Card Scheme
The PM Kisan Credit Card was introduced by the NDA government in the budget of 1998-1999 and developed as a model scheme by the National Bank for Agricultural and Rural Development. The main aim of the Kisan Credit Card was to provide short-term financial assistance and Kisan benefits to the farmers and ensure that they do not fall into the clutches of local moneylenders or any other informal banking sector.
Pm Kisan cards are distributed through local cooperative, regional, rural, and public sector banks. The benefits of the Kisan Credit card are meant for the exclusive use of the Indian farmer only. The main aim of the Kisan Credit Card Scheme was to ensure that lack of credit did not hamper agricultural production due to the farmers’ inability to purchase agricultural inputs.
The PM Kisan Yojana benefits also ensure that the beneficiaries are covered against any permanent, total, or partial disability due to accidents during agricultural production. The interest rate offered on the Kisan Credit Card Yojana credit facilities is around 7% p.a. The repayment terms are also flexible, allowing the farmers to pay back once the harvest is completed.
What is Pradhan Mantri PM Kisan Credit Card Yojana?
The PM Kisan card introduced by the NDA government has been renamed the PM Kisan credit card yojana. As mentioned previously, the benefits of the Kisan credit card are that it helps farmers by providing short-term assistance and Kisan benefits for purchasing seeds, pesticides, and fertilizers on short-term credit. Farmers also use this card to withdraw cash from ATMs to defray their expenses and avail of loans. The industries covered under the ambit of this scheme include animal husbandry and fisheries.
The aim is to reduce unwarranted financial pressure on the farmers due to demands from usurious moneylenders. The PM Kisan also ensures personal accident insurance coverage up to Rs. 50,000 for death and Rs 25,000 for partial disability to cover other risks.
In addition, the Indian government has also launched the PM Samman Nidhi Scheme, which allows the farmers to avail of income support up to Rs 6,000 annually.
Organizations Offering PM Kisan Credit Cards
As mentioned earlier, many public sectors, regional, rural, and cooperative banks offer Kisan Credit Cards to farmers.
The list of PM Kisan credit card names and features are as follows: -
- SBI Kisan KCC: SBI is the largest issuer of Kisan KCCs due to its extensive network of branches throughout the country. The bank charges a low 2% p.a. interest up to Rs 3 lakhs. The loans are based on grain cultivation and cropping pattern. The maximum period of the loan is five years. SBI’s scheme also covers different types of insurance, including personal accident insurance and asset and crop insurance. The SBI Kisan KCC provides a lot of Kisan benefits.
- HDFC Bank Kisan KCC scheme: The maximum limit of interest rates on the Kisan KCC is 9% p.a with a maximum amount of Rs 3 Lakhs. The bank offers additional help with checking books up to Rs 25,000. Farmers can extend the loans up to 4 years after crop failure.
- Axis Bank Kisan KCC: Axis Bank offers interest rates up to 8.55% p.a. The loan tenor can vary from 1 year for a cash credit and short-term loans to 7 years for term loans. The maximum loan amount can range up to Rs. 250 lakhs. The amount of insurance coverage provided is up to Rs 50,000.
- Bank of India Kisan KCC: Bank of India’s credit card for farmers offers credit only up to Rs 50,000. The maximum loan period is five years, and the distinction is provided to only 25% of the farmers. There is also no insurance coverage.
- Central Bank Kisan KCC: The Kisan Credit Cardfrom Central Bank offers a maximum limit of Rs 3 Lakhs for cash credit. No collateral is also required for loans up to Rs 3 Lakhs with interest rates ranging from 7% p.a.
- Union Bank Kisan KCC: The loan tenor is 5 years with a 7% p.a. interest rate. There are no margins on crop loans up to a limit of Rs 1.60 lakhs.
- NABARD is a farmer’s bank that offers long-term loans with easy credit terms and concessional interest rates.
More details can be obtained from PM Kisan website: https://pmkisan.gov.in/
How to Apply for a PM Kisan Credit Card
The application process, both online and offline, is straightforward.
Online Application Process
- Visit the issuing bank’s website.
- Select ‘PM Kisan Credit Card’ from the website list of credit card options.
- After this, click on the ‘Apply’ button.
- As the last step, fill out and submit the PM Kisan KCC application form and the necessary documents.
Offline Application Process
- Visit a branch of the issuing bank.
- Obtain the PM Kisan credit card application form from the bank’s representative.
- Complete and submit the form with all the necessary KYC documentation.
The application will be processed, and if found eligible, the applicant will be updated on the status of their Kisan credit card, and the card will be sent to their address within a few days.
Eligibility Criteria and Documents Required for Kisan Credit Card
Eligibility Criteria
The applicant must familiarize themselves with the eligibility criteria and KYC documents required before applying for a PM Kisan KCC. They must belong to one of the following categories of borrowers:
- An individual or a joint borrower who is an owner cultivator
- A tenant farmer, an oral lessee, or a sharecropper
- Self-Help Group (SHG) or a Joint-Liability Group (JLG) of farmers are also eligible to apply for a PM Kisan KCC.
Documents Required for PM Kisan KCC
Following is the list of documents required to submit to meet KYC requirements. Each bank may have its own list of KYC documents.
- ID proof documents copies which may include any of the following: PAN, Aadhaar, Passport, Driving License, or Voter’s ID
- Address Proof documents which include: Aadhaar, Passport, Voter’s ID, or Driving License
- A PM Kisan KCC scheme application form completed with all details
- Landholding proof, a copy of the title documents in the applicant’s name which has been duly certified by the Revenue authorities
- Two photographs (passport size)
Features and Benefits of the PM Kisan Credit Card
Getting a Kisan KCC is a seamless and effortless way to secure credit facilities and certain Kisan benefits for the Indian farmer without having to subject themselves to the harsh credit terms of the usurious village moneylenders.
The main features and benefits of a PM Kisan include:
- Easy access and a simplified process to access credit
- Farmers are not subjected to a tedious and rigorous process of document verification and securing KYC compliance by the banks.
- Credit is also disbursed seamlessly in easy steps.
- As the Indian farmer’s income is subject to the vagaries of the harvesting season, the inclement weather and other factors, the Kisan KCC offers easy repayment terms where the farmers make payments on their loans after harvesting their crops.
- Under the credit provided by the Kisan KCC, the farmer can meet various agricultural expenses, including purchasing seeds, fertilizers, pesticides and even repairs to agricultural machinery. Loans under this scheme can also be taken to cover personal costs such as children’s education, wedding, or other personal consumption expenses of the farmers. Thus, the farmer secures many Kisan benefits.
- The credit appraisal process is also very flexible, where farmers get loans for up to 3 years without seasonal appraisal of the outstanding loans.
- Normal upper limits on loans are up to Rs. 3 lakhs, but this varies from bank to bank. The agricultural income of the farmer determines the upper limit on the loan sanctioned. The larger the land, the higher the payment, and the credit limit is proportionately higher and vice-versa. The farmer’s annual agricultural expenses are also considered while calculating the maximum limit on the sanctioned loan. Facilities can take cash credit, short-term loans, and term loans.
- The Kisan KCC is also helpful in other ways where the farmers get trade discounts on agricultural products and inputs from dealers of farm products.
- There is a maximum upper limit on the total loan sanctioned. Farmers can execute any number of credit and cash transactions in a day.
- The interest rate charged to farmers on the Kisan KCC credit is at concessional interest rates. The upper interest of the interest varies according to the loan amount, the repayment track record of the farmer and his creditworthiness. The interest rates would be much higher if the farmers were to borrow a standard bank loan.
- In addition to farmers, others engaged in fisheries and animal husbandry can also access these loans.
KCC Credit Limit
Kisan KCC credit limits vary from bank to bank. It also varies according to the tenor and nature of the loans. The credit limit is set, considering the land holdings and the farmer’s annual income. Other factors like the farmers’ creditworthiness and credit reports are also considered. If the farmer has taken previous loans and has a good repayment history without any defaults, it will be straightforward for him to obtain credit under the PM Kisan KCC scheme.
Also, when a farmer takes a PM Kisan KCC, he gets a passbook giving various details like his land holdings, upper credit limit, and the expiry date of the Kisan KCC etc., which makes it easy to keep track of his loan history. As mentioned earlier, some banks like Axis Bank and NABARD provide loan term loans with an extended credit period and concessional interest rates. Banks may even set different credit limits for different types of loans like cash credit, short-term credit, and term loans. Some of these loans may require collateral security.
Interest Rates and Other Charges on PM KISAN KCC
Farmers under the KCC are exempt from the high-interest rates charged by most banks and benefit from concessional interest rates. Interest rates can vary from as low as 2% up to 4% p.a. There are also some subsidies and other schemes to benefit the farmer depending on the farmer’s credit history and repayment track record.
How to Contact the PM Kisan Credit Card Customer Care
In case of grievances or queries on the KCC and to know the benefits and status of PM Kisan KCC, customer care can be contacted.
Customer care toll-free number is: 1800115526 or 011-24300606
Customer care email: pmkisan-ict@gov.in
For ICT-related queries: Dr Ranjna Nagpal, Deputy Director General National Informatics Centre, Email: pmkisan-ict@gov.in
For fund transfer-related queries: Shri Sanjiv Kumar, Additional Secretary & Financial Advisor, Krishi Bhawan, New Delhi-110001. Email: asfa-agri@nic.in
For more details, visit https://pmkisan.gov.in/Contacts.aspx.
Conclusion
The PM Kisan Credit Card is a beneficial financial product for the farmer. Concessional rates of interest, flexibility in loan repayments, added insurance benefits—what’s not to love in a PM Kisan KCC? If you are a kisan, go to Tata Capital for more information on cards, loans, and schemes.
26 September 2022
10 mins read
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