How to apply Kisan Credit Card Scheme

 Purpose for Kisan Credit Card(kcc)

 

Provide financial support to farmers with insurance coverage in case of crop damage due to natural disasters, pests or any disease.

    Encouraging farmers for progressive farming practices, high value inputs and advanced technology in agriculture.

    Stabilizing farmers' farm income is particularly important in years of natural inversion.

    To support and promote the primary production of food grains and oilseeds.

    All farmers will be covered (both loan and non-loan farmers, regardless of the amount of land they have), including sharecroppers and farmers who are farming on leased land.

    Sum Insured: The sum insured may be up to the maximum yield value of the crop. There is an option to cover up to 150 percent of the average crop yield by paying a higher premium.

    Premium Subsidy: 50 percent subsidy has been allowed for small and nominal farmers to be met equally by both the Central and State and Union Territory governments.

Benefits of KCC Scheme for Farmers

Simplifies the delivery process

    Removes rigidity of cash and kind

    No need to apply for loan for each crop

    Certainty of availability of credit at any time and low interest rates reduce the pressure on farmers.

    It helps farmers to buy seeds and fertilizers at their own convenience and ease

    By buying in cash, the farmer also gets a discount from the dealer

    Credit facility for three years – no need for season appraisal

    Maximum credit limit based on agricultural income

    As many withdrawals as are within the credit limit

    Refund after harvest

    Interest rates are applicable as per agricultural advance

    Security, margin and documentation standards are applicable as per agricultural advance

    Timely availability of adequate credit to farmers

    The borrower's entire year's loan requirements are taken into account. Minimum paper work, and simplification of documentation for withdrawing money from the bank

    Flexibility in purchasing cash draw inputs

    Ensuring availability of credit at any time reduces the interest burden on the farmer Flexibility to arrange for borrowing from banks other than banks issued at the discretion of the bank

The essence of the plan of KCC

Kisan Credit Card and Passbook or Card-cum-Passbook are made available to eligible farmers.

    Revolving cash credit facility and withdrawing or reissuing cash as per limit

    The limit will be decided based on the area under cultivation, the pattern of cultivation and the amount of money

    All production credits have to be for the whole year and the limits have to be fixed taking into account other movements related to grain production.

    The sub-limits will cover short-term, medium-term, term credit and will be fixed as per the bank's discretion.

    A card will be valid for 3 to 5 years and will be reviewed annually. In case of good performance, the credit limit can be increased in the form of incentives, which can focus on the increase in prices and changes in farming patterns.

    Each withdrawal must be returned within a maximum of 12 months

    Conversion/resettlement of loan can be done in case of crop loss due to natural calamities.

    Security, margin and interest rates are as per RBI norms

    The operation will be done at the issuing bank (in case of co-operative banks it may also be at Pax), or at any other named bank as per the bank's wish.

    Card and passbook along with withdrawal by slip/cheque

    Crop loans disbursed under the KCC scheme for scheduled crops are covered under the National Crop Insurance Scheme. This scheme was initiated by the Government of India to protect the interests of farmers in case of crop damage due to natural calamities and insects.

Personal Accident Insurance Plans, Essentials

Accidental death and permanent disability of KCC holders are covered under this plan. 50 thousand rupees for accidental death (within 12 months of accident). There is a provision of Rs 50,000 for permanent total disability, loss of two eyes or two limbs or loss of one eye and one limb and Rs 25,000 for loss of one eye or one limb.

    The designated officers of the insurance company shall issue a master insurance policy for each DCCB/RRB to cover all KCC holders. .

    15 rupees for 1 year policy and 45 rupees for three years policy.

    The nominated insurance company shall nominate an officer at each district level, who shall act as the nodal officer for the programs related to personal accident insurance plans of KCC holders in that district.

    The insurance coverage in this policy will be available after the insurance company receives the premium

    Banks will ensure to include the names of the nominees in the Kisan Credit Card com passbook.

    In case of accidental death or disfigurement, to verify the cause of death and the nature of the accident and to recommend the settlement of the insurance claim, there is a simplified claim settlement process, which will include branch managers of the executing bank, lead bank officials and representatives of the insurance company.

Government support to KCC holders

KCC holders are covered under the Personal Accident Insurance Scheme and get an insurance benefit of Rs 50,000 in case of accidental death and Rs 25,000 in case of permanent disability. Its premium is a 2 to 1 ratio between card issuers and borrowers.

    Bankers have been advised to issue KCCs to share farmers, undocumented farmers and giant liability groups.
    Banks have been asked to include all eligible farmers in the KCC scheme
    To effectively implement the scheme at the grassroots level and to support farmers as it is expected, the Government of India has constituted a high-level task force which will suggest various measures to enhance the capacity of the KCC scheme. The task force submitted its report on 30 June 2010
    Bankers have been advised to increase the coverage of KCC to 20 per cent and finance to 20 per cent by the financial year 2009-10 to 2010-11, as per the wishes of the Union Finance Minister. A corresponding increase is expected in 2011-12 as well.

Important steps taken by NABARD

Co-operative Banks and RRBs have been advised to expand the scope of the KCC scheme. It is recommended to make available facilities within the existing crop credit limits as well as cover term loans for agriculture and allied activities and include a reasonable component to meet consumption needs.
    KCC's coverage has been extended to homeless workers, sharecroppers and borrowers.
    The concept of KCC has been extended to borrowers of long-term cooperative structures.
    The concept of KCC has been extended to creditors of long-term co-operative structures.
    A brochure showing the main features, facilities and other relevant information of the KCC scheme has been prepared by the Principal Officer and the RO has been asked to circulate to the State Government Departments, Commercial Banks, RRBs and other concerned agencies and offices to create awareness about the scheme.
    The minimum floor limit of Rs 5,000 for issuance of KCC has been withdrawn.
    NABARD regularly conducts studies on the effectiveness of the KCC scheme
    It is being done so that the problems or issues appearing at the grass root level can be removed if necessary.
    Various commercial banks from RBI, , Cooperatives. Banks, and RRBs have been advised that as per the instructions given to them, they can, at their discretion, offer the interest rate according to their sentiments and other factors in the cash credit account of farmers' Kisan Credit Card with the lowest balance. It takes place from the tenth day of every calendar month till the end.
    RRBs are advised to run innovative campaigns to reach all eligible farmers under the KCC scheme.

Progress in implementation of the plan

Since the inception of the program in August 1998 till March 31, 2013, cooperatives, rural banks and commercial banks have jointly issued 10 crore Kisan credit cards.
     Co-operative Banks in all States and Union Territories (except Chandigarh, Daman Diu and Dadra City Haveli), Rural. Banks and commercial banks are involved.

Rupee Kisan Credit Card

RuPay is an Indian domestic card scheme conceived and launched by the National Payments Corporation of India (NPCI). It was created to fulfill the desire of the Reserve Bank of India to have a domestic open loop and multilateral payment system. The RuPay card competes with MasterCard and Visa cards in India and facilitates electronic payments at all Indian banks and financial institutions.

In January 2013 NABARD set up a Special Project Unit (SPU KCC). Its purpose was to issue KCC credit cards to various cooperative banks and regional rural banks of the country. The main objective of this unit was through guidance, coordination with National Payments Corporation of India, discussions with RRB's sponsoring banks and co-operative banks. Its overall objective is to provide new banking facilities to rural farmers as well as urban areas and develop a cashless eco-system by preparing the farmers. To achieve the above objectives, SPU conducts policy formulation, capacity building and networking among various stakeholders.

The new KCC guidelines state that KCC customers should have the facility of withdrawal through ATM or debit card. To facilitate steps taken in this direction, NABARD has initiated a scheme to provide financial assistance to RRBs and other banks to enable them to issue such cards.

Pungrain (Punjab Grain Procurement Corporation Limited) pays commission agents through credit cards and Kisan Arhita Information has developed a network of commission agents called Remittance Online Network (Kyron) with the help of National Payments Corporation of India. Kotak Mahindra in partnership with Bank Rupe has launched a financial inclusion project where dairy farmers of 75 cooperatives in Bardhaman and Amul areas of West Bengal and Hooghly districts can get their payments directly into their accounts on the day they sell milk. A similar model is being planned in Gujarat. More than 300,000 dairy farmers from 1200 cooperatives will be involved in this scheme.