Q. Under the Kisan Credit Card scheme, short-term credit support is given to farmers for which of the following purposes ?

(1) Working capital for maintenance of farm assets harvesters,
(2) Purchase of combine tractors and mini trucks requirements of farm
(3) Consumption households
(4) Post-harvest expenses
(5) Construction of family house and setting up of village cold storage facility

Select the correct answer using the code given below:

  • 1, 2 and 5 only
  • 1, 3 and 4 only
  • 2,3,4 and 5 only
  • 1, 2, 3, 4 and 5

Answer: (b) 1, 3 and 4 only

Kisan Credit Cards Scheme
  • Kisan Credit Cards scheme was introduced in 1998 for providing adequate and timely credit support from the banking system, under a single window with flexible and simplified procedure to the farmers for their cultivation and other needs like purchase of agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs.
  • The scheme was further extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004.
  • In the Budget-2018-19, government announced the extension of the facility of Kisan Credit Card (KCC) to fisheries and animal husbandry farmers to help them to meet their working capital needs.
  • Implementing Agencies:
    • Commercial Banks
    • Regional Rural Banks (RRBs)
    • Small Finance Banks
    • Cooperatives
  • Features:
    • The scheme comes with an ATM-enabled RuPay debit card with facilities for one-time documentation, built-in cost escalation in the limit, and any number of drawals within the limit.
    • Besides ensuring saturation, banks will also be taking steps to link Aadhaar immediately as no interest subvention will be given if the Aadhaar numbers are not seeded to KCC accounts.
    • Also, the government has taken several initiatives for KCC saturation which include adding farmers engaged in animal husbandry and fisheries, no processing fee of loan under KCC and raising the limit of collateral free agriculture loan from Rs. 1 lakh to Rs.1.6 lakh.
    • The KCC facility will help fisheries and animal husbandry farmers to meet their short-term credit requirements of rearing of animals, poultry birds, fish, shrimp, other aquatic organisms and capture of fish.
  • Objectives:
    • To meet the short term credit requirements for cultivation of crops.
    • Post-harvest expenses.
    • Produce marketing loan.
    • Consumption requirements of farmer households.
    • Working capital for maintenance of farm assets and activities allied to agriculture.
    • Investment credit requirement for agriculture and allied activities.
  • Financial Provisions:
    • To ensure availability of agricultural credit at a reasonable cost of 7% per annum to formers:
      • Government of India implements an interest subvention scheme of 2% for short term crop loans up to Rs. 3 lakh.
      • In addition, the GOI provides interest subvention of 2% and prompt repayment incentive of 3% to the farmers.
  • Eligibility
    • Farmers – individual/joint borrowers who are owner cultivators;
    • Tenant farmers, oral lessees & share croppers;
    • Self Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers including tenant farmers, share croppers etc
  • Delivery Channels:
    • Withdrawal through ATMs / Micro ATM
    • Withdrawal through BCs using smart cards.
    • PoS machine through input dealers
    • Mobile Banking with IMPS capabilities / IVR
    • Aadhaar enabled Cards