Kisan Credit Card has an important feature associated with the farmers’ welfare and that is the amazing credit facility, which can help meet some of the urgent domestic expenses for farmers. The Kisan Credit Card scheme is a credit scheme to farmers for small loans is primarily meant for meeting financial requirements related to crops. Important to note, some part of that loan can be used to meet the domestic needs of the farmers as well.
Farmers can utilize 10 per cent of the short term limit under the KCC scheme for household consumption purposes. The purpose of KCC scheme is to enable farmers meet their crop loan requirements. The Reserve Bank of India (RBI) on its website has already uploaded information with regards to this under its Financial Education (for Farmers) section. The banking regulator advises farmers to not utilize large amounts towards meeting their household expenses since this can be a limitation for the farmer to generate income and repay the loan.
The RBI recently issued an advisory asking banks to extend the benefit of interest subvention (IS) of 2 percent and focus on the Repayment Incentive (PRI) of 3 per cent for short term crop loans up to Rs 3 lakh to farmers, whose accounts have become due or shall become due between March 1, 2020 and May 31, 2020.
Earlier the KCC was targeted for farming purpose only, but in recent times the government has enhanced the facility for those working in animal husbandry and dairy sectors. The government is going to provide KCC to cattle farmers so that they can also avail the benefits of KCC.
The interest rate of loans up to 3 lakh rupees taken through KCC is 9%, and the government gives 2% subsidy on it. So, it falls to 7%. But if returned on time, farmers get 3% more discount, so the rate is 4% only.
Farmers can avail the benefits of Kisan Credit Card Scheme, such as:
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Under this scheme, the farmers can get the benefit of Pradhan Mantri Kisan Samman Nidhi Yojana under this scheme.
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Eligibility for a loan of Rs. 1.60 lakh by the Central government through KCC.
Timely payment of KCC loans will be beneficial for farmers in getting the future loans without any hassle. The Kisan Credit Card (KCC) scheme was launched in 1998 with the aim of providing short-term formal credit to farmers.
With KCC, owner cultivators as well as tenant farmers can avail loans to meet their agricultural needs under this scheme at attractive rates of interest. All in all, this scheme will be beneficial for 14 Crore of the farming population of India.
