Kisan Credit Card

IN NEWS:

• The Centre has covered 45% of targeted 2.5 crore farmers under the ambit of Kisan Credit Card (KCC) in the last two and half months making them eligible for the concessional agriculture credit, as part of Aatmanirbhar Bharat package.
• As many as 1.12 crore KCCs have been sanctioned with credit limit of Rs 89,810 crore as on July 24.

What is KCC?

• A Kisan Credit Card (KCC) is a credit delivery mechanism that is aimed at enabling farmers to have quick and timely access to affordable credit.
• It aims to reduce farmer dependence on the informal banking sector for credit.
• It was launched in 1998 by the Reserve Bank of India and NABARD.
• The card is offered by cooperative banks, regional rural banks and public sector banks.
• All farmers including small and marginal farmers, share croppers and tenants are eligible for the Kisan Credit Card.
• The Self Help Groups (SHGs) or Joint Liability Groups (JLGs)are also eligible for availing KCC.

Features of KCC:

• It simplifies the screening and credit delivery process for farmers.
• The credit limit is based on the land holding, income and credit history of the farmer.
• Offers flexible repayment schedule after the harvest season and enables rescheduling of payments in case of a bad crop season.
• Farmer can use it to make cash withdrawals or to take loans.
• KCC also offers insurance coverage.

How does the KCC work?

• The KCC is like a plastic credit card and can be used as such at banks, ATMs and Points of Sale.
• The KCC allows cash credit to farmers to take care of crop related expenses like seeds, fertilizers, pesticides, electricity and diesel charges etc.
• It also offers term credit for allied activities like buying equipment, land development and drip irrigation.

PRELIMS QUESTION

Consider the following statements regarding Kisan credit card:
1.The card is offered by cooperative banks, regional rural banks and public sector banks.
2.Farmer can use it to make cash withdrawals or to take loans.
Which of the statements given above is/are correct?
(a)1 only
(b)2 only
(c)Both 1 and 2
(d)Neither 1 nor 2

Answer to prelims question