Non availability of timely credit has been a major drawback for the agricultural sector of India. In a country which relies mostly on agriculture, constant endeavors are needed to see that rural and agricultural credit facilities are enhanced with time. As a part of these efforts, agricultural credit cards got introduced in the agricultural lending system. Similarly cash credit facility was also being offered by many banks.
However, a major shortfall in these schemes remained the fact that they were concentrated mainly to the niche segment. The farmers lying in the higher end of the pyramid received access to these schemes while the marginal and small ones still remained unprivileged. The inability of these schemes to market themselves in mass scale led to the establishment of Kisan Credit Card (KCC) scheme.
The KCC scheme was formulated by Government of India (GOI) after consultation with Reserve Bank of India (RBI) and National Bank for Agricultural and Rural Development (NABARD). The Union Budget of 1998-99 announced the idea to develop a model scheme for issuing Kisan Credit Cards to farmers. The scheme was circulated to commercial banks by RBI and cooperative banks by NABARD.
The major objective behind setting up of the scheme was to allow for adequate and timely support to farmers in agricultural activities by banks in a cost effective manner.
Features of Kisan Credit Cards:1.The card has been designed with the aim to provide benefits to farmers in meeting production and cultivation expenses as well as act as a cushion in case of contingencies.
2.A credit cum passbook is also provided with KCC to the farmer.
3.It offers revolving credit facility thereby allowing unlimited withdrawal as well as repayment within the pre designated limit.
4.The card has a repayment period of 12 months. This means every withdrawal made has to be repaid in 12 months time.
5.The validity of the card lies for 3 years subject to annual review.
6.Credit limit has the option to be enhanced on need and performance basis.
7.Rescheduling/conversion of loans is possible in case of genuine situations like natural calamities.
8.Personal Accident Insurance up to Rs.50, 000 is offered to the card holder under Personal Accident Insurance Scheme (PAIS).