Kisan Credit Card: Farmers can get up to Rs 3 lakh loan at 4 percent interest!

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Updated: February 29, 2020 6:26:41 PM

The government through the KCC scheme is aiming at freeing small farmers from the clutches of money lenders. The government has set an estimate of Rs 20,000 crore which will be utilised to sanction loan to KCC cardholders.

PM Narendra Modi to celebrate one year of PM-Kisan in UP's Chitrakoot on Feb 29, will distribute Kisan Credit Cards (KCC) to the beneficiaries of the PM-Kisan, unveil setting up of 10,000 farmers producers companies FPOsKisan Credit Card: The KCC provides short term loans to farmers at an interest rate of 4 per cent on the condition of timely payment.    (Image: PTI)

Kisan Credit Card for PM Kisan Samman Nidhi Beneficiaries: Prime Minister Narendra Modi today launched a saturation drive for distribution of Kisan Credit Cards (KCC) to all the beneficiaries under the PM-KISAN Scheme in Uttar Pradesh’s Chitrakoot today. As part of the drive, over 25 lakh beneficiaries of PM Kisan across the country have been provided KCC. More than 2000 bank branches in rural areas have been tasked with providing the KCC to farmers. PM Modi personally handed over KCC cards to some farmers at the event.

A year after launching PM-Kisan Samman Nidhi Yojana, which provides financial aid of Rs 6000 a year to farmers, the Central government has launched the drive to help farmers benefit from KCC scheme in order to help them get institutional credit from banks to cope up with the high cost of cultivation. A large section of farmers secure loans from unorganised lenders including moneylenders who charge an exorbitant amount of interest on the loans. The government through the KCC scheme is aiming at freeing small farmers from the clutches of money lenders. The government has set an estimate of Rs 20,000 crore which will be utilised to sanction loan to KCC cardholders.

Kisan Credit Card Scheme Benefits

  1. The KCC provides short term loans to farmers at an interest rate of 4 per cent on the condition of timely payment.
  2. According to government-run State Bank of India, interest will be waived up to 3 per cent if the farmer repays the loan promptly. In case of late payment, the bank will charge an interest rate of 7 per cent on the loan amount.
  3. The limit of the card can be increased for a loan up to Rs 3 lakh if KCC holder re-pays his/her due amount on time.
  4. What makes the scheme significant is that no collateral is needed for a loan up to an amount of Rs 1.60 lakh. Collateral security has been waived for the limit of up to Rs 1.6 lakh, according to the information available on the SBI website.
  5. The banks will only charge simple interest on the loans. However, in the case of untimely payment or bank default, compound interest will be charged by the banks.
  6. The amount of loan for the first time will be ascertained by bank officials after factoring in the cost of cultivation and post-harvest expenses. On timely payments of the loans, the limit of the loans can be extended up to an amount of 3 lakh.
  7. Apart from cheap credit, the crop of all farmers who have taken credit via KCC card will also be insured by the crop insurance scheme.
  8. The KCC account will also provide high interest to farmers on their savings in the account. Saving interest rate will be applied on their credit balance.

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