Kisan Credit Card Scheme: The Kisan Credit Card (KCC) scheme was launched to cater to the financial needs of farmers at different stages of farming. It provides a streamlined credit support system through banks, ensuring timely and adequate financial assistance under a single-window approach.
The KCC scheme simplifies the loan process, offering farmers a flexible way to access funds for various agricultural purposes.
Charges and processes for Kisan Credit Card loans explained
The Government of India has clarified various aspects of the KCC scheme in response to questions raised in the Lok Sabha. Here’s what farmers need to know about charges, interest rates, and documentation requirements under the scheme.
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No charges for loans up to Rs 3 lakh
As per an advisory issued by the government, banks have been directed to waive processing, documentation, inspection, and other service charges for KCC loans up to Rs 3 lakh. This measure aims to alleviate the financial burden on small and marginal farmers. However, for loans exceeding Rs 3 lakh, charges such as processing fees and inspection costs are determined by individual banks based on their board-approved policies.
In response to a question asked about the rate of interest being charged on Kisan Credit Card on month/half-year/annual basis, Minister of State in Finance Ministry Pankaj Chaudhary said, “Under the KCC scheme, loans up to Rs 3 lakh are available at a concessional interest rate of 7% per annum. Additionally, farmers who repay their loans promptly can avail interest subvention of 3%, effectively reducing the interest rate to 4% per annum. For loans exceeding Rs 3 lakh, the interest rates are determined by the respective bank’s board-approved policies.”
Acceptance of digital land records
The government has confirmed that digitally signed online land records are valid for KCC applications. However, due to incomplete digitization of land records in many states, banks often require legal opinions to confirm the authenticity of these documents.
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