KCC
Kisan Credit Card Scheme
The Kisan Credit Card is the single most important financial product for Indian farmers — a flexible revolving credit line at the lowest available interest rate. Launched in 1998 on NABARD's recommendation, it functions like a credit card: once sanctioned, farmers can withdraw and repay multiple times within the credit limit without reapplying each time.
**The 4% Interest Story:**
The market rate for farm loans from informal sources is 24%–48% per year. KCC brings this down to 7% base rate, then the Central Government provides a 2% Interest Subvention Scheme (ISS), making it 5%. Farmers who repay on time (by the repayment date, which aligns with harvest season) get an additional 3% Prompt Repayment Incentive (PRI) — bringing the effective rate to just 4% per annum. For loans above ₹3 lakh, interest subvention is available up to ₹3 lakh only.
**What Can KCC Funds Be Used For?**
Short-term credit requirements for crop cultivation; post-harvest expenses and produce marketing; maintenance of farm assets; consumption requirements of farmers during off-season; allied and non-farm activities (processing, storage). Fishermen KCC covers: fuel for boats, boat maintenance, vessel repairs, purchase of fishing nets. Animal husbandry KCC covers: feed, fodder, veterinary costs, lease charges for land.
**KCC as Safety Net — Built-in Insurance:**
KCC holders get built-in Personal Accident Insurance: ₹50,000 cover for death or permanent disability, ₹25,000 for partial disability — included in the card. This is automatic; no additional premium is deducted.
**The 2020 PM-KISAN KCC Saturation Drive:**
In 2020, the Government ran a massive drive to issue KCCs to all PM-KISAN beneficiaries. Banks were directed to issue KCCs to all eligible PM-KISAN holders on simplified documents. If you receive PM-KISAN but don't have a KCC, your bank is supposed to offer you one proactively.
**Fishermen KCC (2018 Expansion):**
Fishermen including inland and marine fishers, fish farmers, and SHG/JLG groups of fishers are eligible for KCC since 2018. Credit limit covers working capital for fishing operations. The no-collateral limit for fishermen is ₹1.6 lakh.
Key Objectives
- Provide timely and adequate credit to farmers for agricultural and allied activity needs.
- Reduce dependence on informal moneylenders by offering institutional credit at 4% effective rate.
- Provide a single, flexible credit facility replacing multiple crop loans.
- Expand credit access to fishermen and animal husbandry farmers.
Benefits
Eligibility
- Individual/joint owner-cultivator farmers
- Tenant farmers, oral lessees, and sharecroppers
- Self Help Groups (SHGs) and Joint Liability Groups (JLGs) of farmers
- Inland and marine fishermen, fish farmers (since 2018)
- Animal husbandry farmers (poultry, dairy, sheep, goat farmers)
- KCC limit is based on Scale of Finance (set by DLTC) for crops grown
- No collateral required for loans up to ₹1.6 lakh
- Credit history and repayment record considered by banks
- Renewal every 5 years — annual review of limit
- Wilful defaulters on any existing bank loan
- Borrowers with NPA (Non-Performing Asset) accounts
How to Apply
Step 1: Visit any commercial bank, Regional Rural Bank (RRB), or cooperative bank branch — OR apply online via the PM-KISAN portal's KCC link
Step 2: Fill the KCC application form — land holding, crops grown, income details
Step 3: Bank calculates KCC limit using Scale of Finance for your crops × area
Step 4: Submit documents (land records, identity proof, photographs)
Step 5: Bank appraises application — typically 14 working days
Step 6: KCC sanctioned — passbook issued with credit limit
Step 7: RuPay KCC Debit Card issued — use at ATMs and rural PoS terminals
Step 8: Draw funds as needed; repay by end of crop season (aligned with harvest calendar)
Step 9: On prompt repayment, bank applies 3% PRI — effective rate becomes 4%
Step 10: Renewal at 5 years — or annual limit review based on crop change
Required Documents
Frequently Asked Questions
What is the interest rate on a Kisan Credit Card in 2025?
The base rate is 7% per annum. The Central Government provides a 2% Interest Subvention, reducing it to 5%. Farmers who repay on time by the repayment date get an additional 3% Prompt Repayment Incentive — bringing the effective rate to just 4% per annum. This applies to KCC loans up to ₹3 lakh.
How is the KCC limit (credit limit) calculated?
The KCC limit is based on: (1) Scale of Finance for each crop (set by District Level Technical Committee) × area under cultivation; (2) post-harvest expense allowance (10% of crop loan component); (3) asset maintenance expenses; (4) consumption requirement. The bank totals all these for a combined KCC limit. A farmer with 2 acres of paddy (SoF: ₹35,000/acre) would get approximately ₹70,000–₹80,000 as crop component.
How do I get a KCC if I am a PM-KISAN beneficiary?
Since 2020, PM-KISAN beneficiaries are eligible for simplified KCC issuance. Visit the branch of the bank where your PM-KISAN instalments are credited. Fill the KCC application form. The bank must process your application on priority under the PM-KISAN KCC saturation drive. You can also apply via the PM-KISAN portal → KCC section.
What happens if I cannot repay my KCC on the due date?
If you cannot repay by the due date: (1) you lose the 3% prompt repayment incentive — your rate goes from 4% to 7%; (2) the account may be classified as overdue and penal interest may apply; (3) if overdue for 90+ days, the account becomes NPA. Contact your bank immediately if you anticipate difficulty — banks can restructure KCC loans under RBI's agricultural debt restructuring guidelines.
Can a woman farmer get a KCC independently?
Yes. Women farmers who own land or are tenant farmers/sharecroppers are fully eligible for KCC. If the land is jointly owned, a joint KCC can be issued. Women-headed SHGs can also get group KCC. NABARD runs special programmes to increase women's KCC coverage. No bank can deny a KCC to a woman farmer solely on gender grounds.
My bank is refusing to issue a KCC even though I am eligible. What can I do?
First, request a written reason for rejection from the bank. If the rejection is unjustified: (1) file a complaint with the bank's grievance redressal officer; (2) approach the Lead District Manager (LDM) of your district who coordinates bank credit; (3) file a complaint with RBI's Banking Ombudsman at cms.rbi.org.in; (4) contact your NABARD District Development Manager. Unjustified KCC refusals are a violation of RBI's agricultural credit priority sector guidelines.
Does KCC cover fishermen? What are the specific benefits for fish farmers?
Yes — KCC was expanded in 2018 to cover all fishermen (inland, marine) and fish farmers. Fishermen KCC covers: fuel costs for boats, maintenance and repairs, fishing nets, lease charges for water bodies, and working capital for fish processing. Credit limit is typically ₹2 lakh–₹5 lakh depending on vessel size and activity. No collateral required up to ₹1.6 lakh. Interest subvention (4% effective rate) applies similarly.
What is the difference between a KCC and a regular agricultural term loan?
A term loan is a one-time disbursement repaid in fixed instalments over a set period — used for capital assets (tractor, irrigation equipment). A KCC is a revolving credit line — you can draw and repay multiple times within the credit limit in the same year, without reapplying. KCC is for working capital (inputs, seeds, harvesting); term loans are for fixed assets. Most farmers need both.