The Kisan Credit Card was launched in 1998-99 by the government of India in association with the Reserve Bank of India and the National Bank for Agriculture and Rural Development (NABARD) to provide a much-needed relief to debt-ridden farmers.
Farmers in India are forced to take loans from lenders at high interest rates burdened by failed crop seasons and poor harvests because of drought or unseasonal rains. Failure to repay means more woes. As a result, the Kisan Credit Card was launched to give loans to farmers at reasonable rates.
Card features:
Usually valid for five years.
Must be renewed annually.
Loans to be repaid after the harvest and sale of crops.
Credit period of 12 months.
Failure of crop season means possible loan extension of loan amount up to four years or more.
Credit limit depends on the lender’s rules and credit score of farmer.
Benefits:
Passbook issued for withdrawal of cash from bank.
Cheque book issued with credit limit of Rs 25,000.
Farmer can purchase seeds, fertilizers, farm equipment with loan amount.
Low bank interest rates, at an average of around 9%.
Maximum credit limit of Rs 3 lakh.
Higher credit limit for farmers with good credit scores.
Subsidies on interest rates to farmers with good credit scores.
Insurance:
Card holders can get insurance coverage under National Crop Insurance scheme for certain crop loan types.
Card holders can also get coverage for failed crop season following natural calamities or pest attacks.
Personal accident cover give to card holders under 70 years.
Application procedures
Kisan Credit Card is available at many nationalised, cooperative or regional banks.
Before sanction, bank will check credit score of applicant.
Bank will also check land holdings, crop pattern, income, etc, of applicant.
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