Banks asked to issue KCC to eligible farmers within 2 weeks of submitting application

With many farmers still out of the ambit of institutional credit, the Centre Wednesday said it has directed concerned banks to issue Kisan Credit Card (KCC) to eligible ones within two weeks of the submission of completed application.

Currently, there are 6.95 crore active KCCs, under which crops loans are given at a subsidised interest rate. The KCC has been extended to farmers involved in animal husbandry and fishery activities as well.

Normally, farm loans attract an interest rate of 9 per cent. But the government is providing 2 per cent interest subsidy to ensure farmers get short-term farm loan of up to Rs 3 lakh at an effective rate of 7 per cent per annum. An additional incentive of 3 per cent is being given to farmers for prompt repayment of loans within due date, making the effective interest rate 4 per cent.

"There are still a large number of farmers who do not have access to institutional credit either because they have not been issued a KCC or the KCC issued earlier were inactive due to various reasons other than default/non-performing assets. The government had therefore decided to launch a campaign to saturate farmers for financial inclusion under KCC," Additional Secretary in the Agriculture Ministry, Dolly Chakrabarthy, said in a letter to banks.

Under the campaign, eligible farmers will be issued KCCs by the concerned banks within two weeks of the submission of completed application forms, she said.

Farmers can avail the option of directly submitting the completed application form with necessary supporting documents to the bank branch for issue of KCC.

Since the credit availed to KCC will be eligible for subsidised interest rates, the official said that the details of Aadhar card number of the applicants will also be captured.

The official further said the camps for collection of applications can be organised bank-wise or village wise. The District Level Bankers Committee will decide the modalities of the camp and the date wise schedule.

The focus will be on issuing KCC in a time-bound manner from the branch where the farmer is already having an account. In case, the eligible farmer is not having any bank account, the same will be immediately opened in any of the nearby branch of his/her choice within the block, the official added.

The campaign will be launched through financial institutions including commercial banks, cooperative banks and regional rural banks in collaboration with the state governments.

The Indian Banks Association has directed all banks to waive processing and inspection fee to enable farmers avail the KCC facility without any additional financial burden.

The official said that farmers already possessing a KCC but involved in activities related to animal husbandry and fisheries can avail an additional sub-limit within an overall crop loan limit of Rs 3 lakh.

Farmers who are involved in activities related to animal husbandry and fisheries but not possessing any KCC will be eligible to get a fresh KCC with credit limit up to Rs 2 lakh at a subsidised rate.