The banking industry in the country has recently initiated Kisan Credit Card (KCC) saturation campaign aimed at extending KCC loans to the farmers who have not yet been beneficiaries of such loans. The Ministry of Agriculture and Farmers’ Welfare records indicate that presently, there are 6.92 crore active KCCs, contrasted with 14.5 crore operational landholdings.
Kisan Credit Card (KCC) Scheme
Launched in 1998, the Kisan Credit Card (KCC) scheme’s primary objective is to offer the farming community adequate and prompt credit support from the banking system. The credit assistance comes under a single window with flexible terms and a simplified process. Through this credit card, farmers can finance their cultivation, and other requirements like purchasing agricultural inputs inclusive of seeds, fertilizers, pesticides, and others. In addition, it provides the facility to withdraw cash for production needs.
In 2004, the scope of KCC expanded to include investment credit needs of farmers. The card now covers post-harvest expenses, produce marketing loan, farmer household consumption requirements, working capital for farm asset upkeep, and activities related to agriculture, investment credit need for agriculture and its associated activities. Several institutions implement the Kisan Credit Card Scheme, including Commercial Banks, RRBs, Small Finance Banks and Cooperatives.
Aadhaar Linking and Interest Subvention Scheme
For KCC accounts to benefit from interest subvention, Aadhaar numbers must be linked to them. Under the Interest Subvention Scheme, short-term crop loans up to ₹3 lakh are made available to farmers at an interest rate of 7 per cent per annum. The government offers an interest subvention of 2 per cent through lending institutions such as PSBs and private sector commercial banks. National Bank for Agriculture and Rural Development (NABARD) and the Reserve Bank of India (RBI) implement this policy, effective from 2006-07.
New Additions to KCC Saturation Initiative
The government has put forth several initiatives for KCC saturation. These include incorporating farmers engaged in animal husbandry and fisheries, waiving off the loan processing fee under KCC, and raising the collateral-free agriculture loan limit from ₹1 lakh to ₹1.6 lakh.
| Fact | Detail |
|---|---|
| Live KCCs | 6.92 crore |
| Operational Landholdings | 14.5 crore |
| Credit Limit for short-term crop loans | ₹3 lakh |
| Interest Rate for short-term crop loans | 7% per annum |
| Interest Subvention provided by Government | 2% |
| Limit of Collateral Free Agriculture Loan | ₹1.6 lakh |
Conclusion
Overall, the Kisan Credit Card Scheme continues to be a game-changer in the banking sector’s approach towards providing financial support to the farming community. The recent saturation campaign, along with the provision for interest subvention on Aadhaar-linked KCC accounts, makes it a significant tool for bolstering the agricultural sector.
