Kisan Credit Card

Other features include:

• Farmers who are eligible for the Kisan Credit Card is offered a passbook or a card-cum-pass book.
• If a farmer is eligible for a production credit of Rs. 5000 or more, then he/she is eligible for a Kisan Credit Card.
• As per the concerned bank’s discretion, sub-limits may be fixed.
• The facility of revolving credit is available for any amount of withdrawals and repayment made within the credit limit. The credit limit is fixed based on the individual’s land holdings, a scale of finance, annual production credit needs, etc.
• Based on the annual review, the credit card can be valid for up to 3 years.
• Repayment for the amount borrowed can be made within a period of up to 12 months.
• Credit limits will be increased to take care of change in cropping pattern, increase in costs, etc. as an incentive for good record on credit card usage.
• Operations will be either though maybe through PACS in the case of Cooperative Banks or issuing branch in case of other banks, at the sole discretion of the bank.
• Conversion/rescheduling of loans also permissible in case of damage to crops due to natural calamities.
• Security, margin, rate of interest, etc. are set as per RBI norms.

Benefits of Kisan Credit Card:

• Flexible repayment options
• Hassle-free disbursement procedure
• Single credit facility/ term loan for all agricultural requirements
• Dependable and easily available credit which enables a decrease in the farmer’s interest burden.
• Assists in the purchase of fertilizers, seeds, etc.
• Assists in availing cash discounts from merchants/ dealers
• Credit is available for a period of up to 3 years, without any seasonal appraisals.
• Income from agricultural sources determines the maximum credit limit.
• There is no restriction on the cash withdrawals that can be made by the Kisan Credit Card holder, as long as it is within the credit limit set by the bank.
• Repayment can be made once the harvest season in over.
• Lower interest rates.
• Margin, security and documentation terms and conditions are similar to that applicable to agricultural advance.
• Credit is made available for annual agricultural requirements and expenses.
• Minimal documentation and maximum flexibility offered for withdrawal of the required funds from the Bank.
• Funds can be withdrawn from any of the Bank’s branches, as per the sole discretion of the bank.

Interest and other charges on Kisan Credit Cards:

Kisan Credit Card interest rates, as well as credit limits, varies from bank to bank. Generally, the applicable interest rate per annum for Kisan Credit Cards is 9%, for a credit limit of maximum Rs. 3 Lakh. Central government allows certain subsidies on interest rate applied by the financing institutions, provided that the cardholder’s credit history is good. The additional interest subsidy provided is 2% and if the customer has a sound track record for three years, he/she is eligible for an increase in the credit limit. Other charges and fees involved in taking credit under this scheme are insurance premium, processing fees, passport photo charges, charges on land mortgage deed, etc.

Top Banks Providing Kisan Credit Card in India:

• NABARD – NABARD offers term loans and easily accessible credit to farmers to meet their basic agricultural expenses.
• SBI – Short-term credit is offered by SBI to farmers, for the purpose of meeting the production credit requirements, expenses related to allied activities, as well as contingency expenses.
• Bank of India – provides flexible financial support to farmers in order to help meet the expenses involved in cultivation and other non-farm activities, at a lower cost.
• IDBI – IDBI offers Kisan Credit Cards to farmers along with additional features like crop loans, investment credit and working capital for meeting agricultural expenses. Farmers, tenant cultivators, owner-cultivators, individual farmers and sharecroppers are considered eligible for the Kisan credit card.
• NPCI – RuPay Kisan credit cards are to be offered in the near future by National Payments Corporation of India (NPCI), as a part of its domestic card scheme for multilateral payments – RuPay.

Kisan Credit Cards offered by Different banks: A Brief Comparison