KCC Full Form

What is the full form of KCC ?

The full form of KCC is Kisan Credit Card . An initiative to provide Indian farmers with Kisan credit cards was known as the Kisan Credit Card (KCC) plan when it was first implemented in August 1998 by public sector banks in India. The R. V. Gupta Committee's suggestions were used to develop this model plan, which was created by the National Bank for Agriculture and Rural Development (NABARD) to give advances for agricultural requirements.

Its goal was to provide farmers with financial assistance in order to meet the industry's complete credit requirements for agriculture, fishery, and animal husbandry by 2019. All commercial banks, regional rural banks, and state cooperative banks are among the entities that are participating. Both term loans and short-term finance for crops are included in the scheme. Holders of KCC credit are also covered by personal accident insurance for risks up to 25,000 for other risks and 50,000 for death and permanent disability. In a 2:1 ratio, the bank and the borrower split the cost of the premium. With the possibility to add up to three more years, the validity term is five years. The credit provided to farmers via Kisaan Credit Card (KCC) comes in two flavours: cash credit (for working capital) and term credit (for capital purchases like cattle, pump sets, land development, plantations, drip irrigations, etc.).

The scheme's applicability

Commercial banks, Railways recruitment boards, small finance banks, and cooperatives are responsible for putting the Kisan Credit Card Scheme into action.

Purpose and objective

The Kisan Credit Card scheme aims to give farmers access to sufficient and prompt credit support from the banking system through a single window with a flexible and straightforward procedure for their farming and other needs as listed below

• To meet the short-term credit needs for crop cultivation.

• Post-harvest costs.

• Produce marketing loans.

• Consumer spending needs of farmer households, working capital needs for the upkeep of farm assets, and other agriculturally related activities.

• Agriculture and related activities must have investment credit.

Eligibility

• Farmers who are sole proprietors of their farms and individual or joint debtors

Sharecroppers, tenant farmers, and oral lessees.

• Self-Help Groups (SHGs) or Joint Liability Groups (JLGs) of farmers, such as tenant farmers and sharecroppers, are also included.

Disbursement

A revolving cash credit facility characterises the short-term portion of the KCC limit. There shouldn't be a cap on the amount of debits and credits. Any of the following delivery channels may be used to draw the total number of tickets allowed to be drawn for the current season or year.

• using a branch or a check facility for operations.

• ATM or debit card withdrawal.

• Operation via "banking outlet/part-time banking outlet" and business correspondents

• Point-of-sales operations are offered in sugar mills, contract farming firms, etc., particularly for tie-up advances.

• Operations using the input dealers' poster of sales.

• Transactions using mobile technology at mandies and dealers of agricultural inputs.

Electronic kisan credit card distribution

All new KCCs must be issued as smart cards or debit cards. Additionally, farmers must receive smart cards and debit cards when their existing KCC is renewed.

The aggregate KCC limit consists of two separate parts, the short-term credit limit and the term loan limit, each with its own interest rates and repayment terms. Two separate electronic cards may be issued for all new or renewed cards until a composite card could be issued with the proper software to separate account transactions in the sub-limits.

Validity/Renewal

The KCC's validity duration and periodic assessment are up to the banks.

• Depending on the borrower's performance and the increase in cropping area or pattern, the review may result in the facility being continued, having its limit increased, or having its limit cancelled and the facility being withdrawn.

• The period for determining whether the farmer's activities are satisfactory or not is prolonged along with the increased credit limit when the bank extends or reschedules the payback period due to natural disasters that affect the farmer.

• When a proposed extension lasts longer than one crop season, the total amount of debits for which the extension is granted must be transferred to a separate term loan account with the requirement that repayment is made in installments.

Other attributes

• According to recommendations from the Indian government and/or state governments, the applicable interest subvention or incentive for quick repayment. The bankers will adequately publicise the facility so that as many farmers as possible can take advantage of the programme.

• In addition to the required crop insurance, the KCC holder should be given the choice to benefit from any asset insurance, accident insurance (including personal accident insurance scheme), and health insurance (where available), with premiums paid through his/her KCC account. According to the terms of the program, the farmer or bank must pay the premium. At the time of application, farmer beneficiaries should be informed of the insurance coverage options and given the opportunity to give their consent (except in the case of mandatory crop insurance).

• When applying for a KCC loan for the first time, there is a one-time document required, and from the second year on, the farmer must simply declare the crops they have grown or plan to grow.