What is Kisan Credit Card (KCC)?
Kisan Credit Card is a credit delivery mechanism to meet the credit needs of the farmers during the crop season in a timely and hassle-free manner by giving financial support to them. All the Commercial Banks, Regional Rural Banks, and Cooperative banks issue such credit cards.
Kisan Credit Card scheme was introduced by NDA Government in August 1998 on the basis of the model scheme prepared by the National Bank for Agriculture and Rural Development (NABARD) in consultation with the Major Banks.
Benefits of Kisan Credit Card Scheme (KCC) to Banks
Kisan Credit Card Scheme provides adequate, hassle-free and timely credit support from the banking system under a single window to the farmers. The main objectives of the scheme are:
- To meet the short term credit requirements for cultivation of crops
- Post harvest expenses
- Produce Marketing loan
- Providing insurance coverage to Kisan Credit Card holders.
- Consumption requirements of farmer household
- Providing working capital for maintenance of farm assets
- Providing working capital for activities allied to agriculture such as dairy animals, inland fishery etc.
- Offering protection against loss of crops due to pest attacks, natural calamities, etc.
Objective/ Purpose of Kisan Credit Card Scheme
- Transaction cost to the banks is reduced
- Reduction in the work load of rural branches
- Increase in banks' business
- Simplification of documentation
- No need for repeated appraisal and processing of loan papers
- Quick & easy disbursement procedure
- Business reach gets improved
- Improved recycling of funds
- Better relationships with customers
- Better recovery of loans
What is Personal Accident Insurance Scheme (PAIS) for KCC Holders?
Personal Accident Insurance Scheme (PAIS) is an accident insurance scheme especially designed for KCC holders. NABARD has, in consultation with the representatives of insurance companies, bankers and Govt. of India, finalised the Personal Accident Insurance Scheme for KCC holders, for uniform implementation by banks throughout the country. It was introduced on 14 June 2001.
It covers risk of KCC holders against:
- Death (or)
- Permanent Disability
Death (within 12 months of the accident) or permanent disability should be resulting from accidents caused by external, violent and visible means.
It gives following risk covers:
- Death due to accident (within 12 months of the accident) caused by outward, violent and visible means: Rs 50,000
- Permanent total disability: Rs.50,000
- Loss of two limbs or two eyes or one limb and one eye: Rs.50,000
- Loss of one limb or one eye: Rs.25,000
KCC holder has the option to take benefit of Accident Insurance (including PAIS) whose premium has to be paid by him through his KCC account. Premium payable Rs.15/- for a one year policy while Rs.45/- for a 3-year policy. Premium has to be borne by farmers/bank according to the terms of the Scheme. To avail this insurance cover, the applicant should not be over 70 years of age at the time of availing the Kisan Credit Card