Ahead of Budget 2023, SBI Research said that the government should focus on agriculture and rural economy development alongside infrastructure development. This should include incentives for some of the agriculture schemes such as Kisan Credit Card (KCC) to make it more effective in helping small and marginal farmers.
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Kisan Credit Card (KCC) scheme helps farmers in purchasing agriculture products and services on credit at any time. It aims at providing adequate and timely credit support from the banking system under a single window with a flexible and simplified procedure to the farmers for their cultivation and other needs, according to the RBI statement.
Recently, the government introduced Interest Subvention Scheme (ISS) to ensure that the farmers pay a minimal interest rate to the bank while applying for this credit card.
Now, SBI Research said that the payment of interest should be enough for renewal of KCC loans and the same should be announced in Budget 2023.
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"Renewal for KCC loans requires payment of both principal and interest, to ensure interest subvention. It is proposed that the payment of interest should be enough condition for renewal of KCC loans of small and marginal farmers for amounts up to Rs 3 lakhs," the report said.
KCC comprises 60 percent of the outstanding credit by banks worth Rs 15.9 lakh crore to agri and allied activities.
Who can apply for KCC?
Farmers—individual/joint borrowers who are owner cultivators, tenant farmers, oral lessees and share croppers; self-help groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant farmers, share croppers etc can apply for KCC.
The borrower should be a minimum of 18 years of age and a maximum of 75 years. In the case of senior citizens, it is compulsory to have a co-borrower who is a legal heir.
Which banks offer KCC?
Many popular banks in India offer the Kisan Credit Card scheme such as the State Bank of India (SBI), HDFC Bank, ICICI Bank, Axis Bank, and Central Bank of India, among others.
The interest rate on the KCC differs from one bank to another along with its credit limit. Other fees and charges such as processing fees, insurance premiums etc. are set at the discretion of the issuing bank.
First Published: Jan 30, 2023 4:30 PM IST
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