The country's largest bank, State Bank of India, is planning to launch a credit card exclusively for farmers through its credit card arm SBI Cards, a joint venture company between SBI and GE Capital.
Already pilot projects for the product have been launched in in Rajashtan, Gujarat and Madhya Pradesh, said Rajnish Kumar, Chairman, SBI, at an event in Kolkata today.
"This will be the first credit card, aimed exclusively for farmers. We have launched farmers' credit card in three states and have received about 100 applications. Based on its success, we will go for a nationwide launch," said Kumar at the launch of mobile shopping and delivery management app for farmers by a Mumbai-based start-up called POORTI Agri Services. Like other cards, farmers can avail 40-45 days of interest-free period in the farmers' card, he said
While the interest applicable for farmers' credit card will be at par with a normal credit card, farmers would have to pay less penalty in case of delayed payment under farmers' credit card compared to ordinary ones.
Also, 70-80 per cent of the credit card limit would be mandatory for agriculture-related purchased, said Kumar.
Under today's partnership with POORTI, SBI will provide a payment gateway for transactions launched under the new app. Also, it will provide credit facilities to buyers and sellers on the platform.
At present, normal credit cards attract a monthly finance charges of about 3.35 per cent per month (40.2% per annum).
Under the Kisan Credit Card (KCC) scheme, farmers get Rupay debit card. Under the KCC scheme, farmers get interest subvention of 2 per cent per annum for loan amount up to Rs 300,000. Thus, the interest of 7 per cent annual is be charged for one year or up to the repayment due date, whichever is earlier. An additional interest subvention of 3 per cent per annum is for prompt repayments.