Lok Sabha Question No. 3206 (UNSTARRED), answered on 2022-03-22
Subject: Kisan Credit Card Scheme
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Sunil Kumar Pintu

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA UNSTARRED QUESTION NO. 3206

TO BE ANSWERED ON 22 ND  MARCH, 2022

## KISAN CREDIT CARD SCHEME

3206.    SHRI SUNIL KUMAR PINTU:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एंव कसान कयाण मंी be pleased to state:

- (a) whether the Government is considering any proposal to simplify the Kisan Credit Card (KCC) Scheme on the line of credit cards of general banks;
- (b)  if so, the extent to which the KCC Scheme is cheaper or dearer in comparison to the interest levied on car and home loans;
- (c)  whether efforts are being made by the Government to connect more farmers with the KCC Scheme through camps in villages and if so, the details thereof;
- (d) whether the Government will provide relief in the interest on big loan amounts under KCC Scheme;

(e) if so, the details thereof; and?

- (f)  if not, the reasons therefor?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE कृ ष एंव कसान कयाण मंी (SHRI NARENDRA SINGH TOMAR)

(a)  &  (b):  The  Reserve  Bank  of  India  has  issued  Master  Circular  on  Kisan  Credit  Card Scheme vide circular FIDD.CO.FSD.BC.No.6/05.05.010/2018-19 dated July 04,2018. The scheme aims at providing  adequate  and  timely  credit  support  from  the  banking  system under a single window with flexible and simplified procedure to the 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. for their cultivation and other needs as indicated below:

- (i) To meet the short term credit requirements for cultivation of crops;
- (ii) Post-harvest expenses;
- (iii) Produce marketing loan;
- (iv) Consumption requirements of farmer household;
- (v) Working capital for maintenance of farm assets and activities allied to agriculture;
- (vi) Investment credit requirement for agriculture and allied activities.

Further, Reserve Bank of India vide circular FIDD.CO.FSD. BC.12/05.05.010/201819  dated  February  04,  2019  has  extended  KCC  facility  to  farmers  engaged  in  Animal Husbandry and Fisheries for their working capital requirements.

Government of India is also implementing Interest Subvention Scheme under which interest subvention (IS) of 2% and Prompt Repayment Incentive (PRI) of 3% is given to farmers on Short Term Agri Loan upto 3 lakh which makes the effective rate of interest on such loans at 4%.

(c) to (f): The following steps have been taken to bring the maximum number of farmers under KCC in order to provide easy access to concessional institutional credit and simplify the process to avail KCC:-

-  All the charges  including processing  fee, inspection, ledger folio charges, service charges for loans upto Rs.3.00 lakh were waived off.
-  Collateral free loan limit for short term agri-credit has been raised from Rs.1.00 lakh to Rs.1.60 lakh by RBI.
-  State Governments have been advised to hold bank-wise and village wise camps to collect  KCC  application  forms  from  eligible  farmers  and  the  applications collected therein to be submitted to the Bank's branch.
-  KCC is to be issued within 14 days from the receipt of completed application.
-  A simple one-page special application form was also designed and shared with banks.
-  The  KCC  has  been  extended  to  the  farmers  doing  allied  activities  including Animal Husbandry, dairying and fisheries.

From  February,  2020  Government  of  India  is  running  KCC  Saturation  drive  in collaboration with DFS and other stakeholders in order to increase coverage under Kisan Credit Card Scheme. As a result, 2.92 crore KCC has been issued with sanctioned credit limit of Rs. 3.20 lakh crore as on 25 th February, 2022.

The  Government of India also implements the Interest Subvention Scheme with a view to provide short term Agri-loans to the farmers at concessional rate of interest. Under the scheme, short term crop loan upto Rs. 3.00 lakh is available to farmers engaged in Agriculture  and  other  allied  activities  at  benchmark  rate  of  9%.  Government  of  India provides 2% Interest Subvention on the benchmark rate. Additional 3% subvention is also given to the farmers for prompt and timely repayment of loans; thus the effective rate of interest comes down to 4% per annum.

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