Centre to launch special drive to double footprint of Kisan Credit Cards, banks to waive various charges
Vishwa Mohan | TNN | Feb 5, 2019, 21:03 ISTNEW DELHI: Seeking to bring all landholder cultivators within the institutional credit system, the Centre has decided to aim at doubling the footprint of Kisan Credit Cards from the existing 6.95 crore active cards with farmers to around 14 crore cards in due course with most being issued ahead of the general elections.
“The agriculture ministry has written to all states and Union Territories (UTs), seeking their cooperation in this campaign. Idea is to saturate the farmers with KCCs so that they can get access to institutional credits and avail interest subvention available to them,” said Union agriculture secretary Sanjay Agarwal.
A concerted campaign will be launched through financial institutions including commercial banks, cooperative banks and regional rural banks (RRBs) in collaboration with state governments so as to issue KCCs to eligible farmers within two weeks of the submission of completed application forms.
Agarwal told TOI that the finance ministry too on Monday wrote to chairman/managing directors and CEOs of all public and private sector banks in this regard.
The KCC scheme was introduced in 1998 to facilitate and make credit available to farmers so that they are not forced to depend on private moneylenders. The cards are issued to farmers on the basis of land holdings and it helps them avail credit for purchase of agriculture input such as seeds, fertilisers, pesticides and other production needs.
The government provides interest subvention of 2% and prompt repayment incentive of 3% to the farmers, making the credit available to them at subsidised rate of 4% per annum.
However, there are still a large number of farmers who do not have access to institutional credit in absence of the KCC. Levy of various recurring and non-recurring charges, complex documentation and cumbersome procedures adopted by certain banks for sanctioning credit limits are among reasons behind low penetration of the KCC among landholder farmers.
Acting on finance ministry’s advise, the Indian Banks Association, however, on Monday issued an advisory to all banks, asking them to waive processing, documentation, inspection, ledger folio charges and all other service charges for KCC and crop loans up to Rs 3 lakh.
“This will enable farmers avail the KCC facility without any additional financial burden,” said a note, sent by agriculture ministry to all the states and financial institutions on Monday while pitching for the campaign to increase KCCs’ footprints across the country.
The finance ministry, on its part, urged all banks to ensure that all “eligible farmers are issued KCCs within two weeks of the submission of completed application forms”.
Since the Centre has extended the benefits of KCC with interest subvention to even those farmers who are engaged in activities related to animal husbandry and fisheries, the agriculture ministry is in the process of issuing a detailed circular in this regard where such farmers will be eligible for getting cards with credit limit of up to Rs 2 lakh.
“The agriculture ministry has written to all states and Union Territories (UTs), seeking their cooperation in this campaign. Idea is to saturate the farmers with KCCs so that they can get access to institutional credits and avail interest subvention available to them,” said Union agriculture secretary Sanjay Agarwal.
A concerted campaign will be launched through financial institutions including commercial banks, cooperative banks and regional rural banks (RRBs) in collaboration with state governments so as to issue KCCs to eligible farmers within two weeks of the submission of completed application forms.
Agarwal told TOI that the finance ministry too on Monday wrote to chairman/managing directors and CEOs of all public and private sector banks in this regard.
The KCC scheme was introduced in 1998 to facilitate and make credit available to farmers so that they are not forced to depend on private moneylenders. The cards are issued to farmers on the basis of land holdings and it helps them avail credit for purchase of agriculture input such as seeds, fertilisers, pesticides and other production needs.
The government provides interest subvention of 2% and prompt repayment incentive of 3% to the farmers, making the credit available to them at subsidised rate of 4% per annum.
However, there are still a large number of farmers who do not have access to institutional credit in absence of the KCC. Levy of various recurring and non-recurring charges, complex documentation and cumbersome procedures adopted by certain banks for sanctioning credit limits are among reasons behind low penetration of the KCC among landholder farmers.
Acting on finance ministry’s advise, the Indian Banks Association, however, on Monday issued an advisory to all banks, asking them to waive processing, documentation, inspection, ledger folio charges and all other service charges for KCC and crop loans up to Rs 3 lakh.
“This will enable farmers avail the KCC facility without any additional financial burden,” said a note, sent by agriculture ministry to all the states and financial institutions on Monday while pitching for the campaign to increase KCCs’ footprints across the country.
The finance ministry, on its part, urged all banks to ensure that all “eligible farmers are issued KCCs within two weeks of the submission of completed application forms”.
Since the Centre has extended the benefits of KCC with interest subvention to even those farmers who are engaged in activities related to animal husbandry and fisheries, the agriculture ministry is in the process of issuing a detailed circular in this regard where such farmers will be eligible for getting cards with credit limit of up to Rs 2 lakh.
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