Interest and Credit Limit of Kisan Credit Card

Interest and Credit Limit of Kisan Credit Card

1. The interest rate on Kisan Credit Card is different for different banks as it is linked to the Base Rate and is left to the discretion of the banks.
2. The interest charged by bank also depends upon the borrowing limits.
3. The interest charged by bank also based upon the track record of the card holder.
4. The range of interest rate is from 9% to 13.5%.
5. After a period of 3 years of sound track record of Card Holder, the credit limit of the Kisan Credit Card can be enhanced.

Margin under Kisan Credit Card (KCC)

Following margin is required by the majority of banks under Kisan Credit Card Scheme:

1. For crop loans, no separate margin need be insisted upon as the Margin is in-built while fixing the Scales of Finance.
2. For term loan component, it will be in conformity with the guidelines of RBI from time to time.

Technical Feasibility under Kisan Credit Card (KCC)

• Suitability of soil, climate and availability of adequate irrigation facilities.
• Suitability of the produce for storage.
• Suitability of the storage unit

Security Requirements of Kisan Credit Card (KCC)

1. Hypothecation of crops: For KCC limit upto Rs.1 lakh banks are to waive margin/security requirements.
2. With tie-up for recovery: Banks may consider sanctioning loans on hypothecation of crops up to card limit of Rs.3 lakh without insisting on collateral security.
3. Collateral security: Collateral security may be obtained at the discretion of Bank for loan limits above Rs.1 lakh in case of non-tie-up and above Rs.3 lakhs in case of tie-up advances.
4. In states where banks have the facility of on-line creation of charge on the land records, the same shall be ensured.
5. Security will be applicable as per RBI guidelines prescribed from time to time.

Disbursement under Kisan Credit Card (KCC)

The short term component of the KCC limit is in the nature of revolving cash credit facility. There should be no restriction in number of debits and credits. The disbursement is allowed using any of the following delivery channels:

1. Operations through bank branch
2. Operations using Cheque facility
3. Withdrawal through ATM / Debit cards
4. Operations through Business Correspondents and ultra thin branches
5. PoS available in Sugar Mills/ Contract farming companies, etc.
6. PoS available with input dealers
7. Mobile based transfers at agricultural input dealers and mandis

The long term loan for investment purposes may be drawn as per instalment fixed.