Kisan Credit Card

Agriculture is an important area of our economy and helpful in developing agriculture loan, make the agriculture production grow, sustainable and profitable farming system. Lack of sufficient holding does not allow them to adopt new technology and scientific farming. Crop loan at lower rate of interest and availability of sufficient crop loan from the commercial banks is not only helpful in increasing farm productivity but will also improve their economic condition, creation of assets and food security along with social security. Due to this reason, State/Government of India is interested in adding more and more farmers with the banking system and avail crop loan from commercial banks to improve their economic condition.

The state government is aimed at transforming the state into a “Grainary of the Nation” by ensuring food and nutritional security and to improve the quality of village life with inclusive and sustainable growth in the agriculture sector.

The state government has given special emphasis in Agriculture Policy on availability of crop loan through Kisan Credit Card to all eligible farmers of the state in view of ensuring easy availability of farm inputs and increasing utilization of crop loan in it.

Government of India has accepted the recommendations of task force organized by Government of India, Ministry of Finance, Department of Finance Services to review the scheme of Kisan Credit Card and convert it into smart card cum debit card. On the basis of recommendations accepted by Government of India ,operational guide lines has been issued to the banks in following important issues has been included:-

Estimation of Crop Loan Component

• Financial requirement will be estimated on the basis of Insurance Installment x limit of crop area + 10% of the loan limit for requirement of domestic use after harvesting + 20% for maintenance of farm assets.
• Flexi Kisan Credit Card with general estimation decided for marginal farmers.
• Validity of Kisan Credit Card is 5 years.
• No need to emphasize for separate margin money as it is included in financial requirement.
• No withdrawal will be pending from the account for more than 12 months. At no time, there is need to reduce the mount to zero in the account.
• Interest subsidy / incentive will be available for timely payment as per standard laid down by Government of India and / or State Government.
• No processing fee up to the limit of Rs.3.0 lacs.
• One time accounting at the time of first withdrawal and then after general declaration (In relation to crop sown/proposed crop).

Benefits of Kisan Credit Card
The objective of the state government is to ensure availability of timely and sufficient crop loan to the farmers through Kisan Credit Card from commercial, rural and cooperative banks operating in the state so that the farmers can fulfill their need of agriculture and other requirements related to agriculture and contribute in agriculture development. Benefits of Kisan Credit Card are as follows:

• Fulfill the need of crop loan in short period.
• To incur expenditure after harvesting.
• Repayment of market loan.
• Fulfill the requirement of family in hard ship days.
• Repair of farm implements.Incur expenditure required for other farm related works.
• Coverage under Farmer Accident Insurance Scheme.
• Benefit of reduction in rate of interest declared by State/Government of India on timely repayment of crop loan.
• Cover on the basis of crop loans taken through Kisan Credit Card under Pradhan Mantri Crop Insurance Scheme and reorganized season based crop insurance for notified crops.

Interest Subsidy to the Farmers

Government of India started interest subsidy scheme on crop loan for the farmers in the year 2006-07 in which banks provide crop loan to the farmers at annual interest rate of 7% up to Rs.3.0 lacs. At present, on timely or early payment, 3% additional discount is given to the farmers. So if the farmers repay the loan in time or before scheduled time, he has to pay only interest at the annual rate of 4%ouse.To prevent distress sell and on production of receipt on storage of grains in ware house, the farmer will get the same rate of discount up to 6 months after harvesting as he gets during cropping period ie., interest will be payable at the rate of 4% per annum. This facility will be available to the farmers of Kisan Credit Card holder Small and marginal farmers.

Beneficiary:

All farmers who have land holdings.

Benefits:

As per above.