What is a Kisan credit card? Everything you need to know about the scheme | Mint
Source: Live Mint
In Union Budget 2025, Finance Minister Nirmala Sitharaman announced an increase in the Kisan credit card limit from ₹3 lakh to ₹5 lakh. This step has been taken by the Government of India to primarily enhance credit access for farmers, facilitate financial inclusion, promote financial support for agricultural needs and boost rural growth.
What is the Kisan credit card scheme?
Kisan Credit Card (KCC) is a scheme that was launched in 1998. It provides short-term loans to farmers. These loans are provided to the farmers at subsidized rates. Now the main objective of the scheme is to enhance access to funds for farming activities such as buying seeds and equipment.
Now it is important to note that until March-April 2024, the KCC scheme had 7.75 crore active accounts. Further, the total outstanding loan amount of ₹9.81 lakh crore has been sanctioned under this scheme. Hence, signifying the importance of this scheme for the welfare of the farmers.
What are the key changes in the Kisan credit card scheme?
In the budget 2025, Union Finance Minister Nirmala Sitharaman announced a significant increase in the loan limit under the KCC scheme, raising it from ₹3 lakh to ₹5 lakh. This change will enable farmers to meet their financial needs and to also promote digital financial inclusion.
How does the Kisan credit card work?
The Kisan credit card is equipped with a Personal Identification Number (PIN) and an International Identification Number (IIN). It works as a magnetic stripe card.
Using this card, farmers can now easily take out funds from ATMs, making it easier to access credit when needed. Under the revised interest subsidy program, farmers can now access loans of up to ₹5 lakhs.
What are the recent changes in the Kisan credit card scheme?
According to the budget 2025, the major change is the extension of this scheme to 7.7 crore farmers. This expansion will allow more farmers, specially those with very limited or small landholdings. It will also help individuals who are in allied activities like animal husbandry and fisheries. Further, this scheme will also promote digital financial inclusion for the Indian citizens.
How is the Kisan credit card scheme expanding its reach?
Budget 2025 focuses on expanding the reach of the KCC scheme to an additional 10 million farmers. This initiative will help underserved farmers access credit and receive much-needed financial support.
What are the subsidies under the Kisan credit card scheme?
It is important to note that under the KCC scheme, loans of up to ₹3 lakh are offered at a concessional interest rate of 7%. Moreover, farmers who repay their loans on time can benefit from a 3% interest subsidy, effectively reducing the interest rate to 4%. Loans above ₹3 lakh, however, will be subject to interest rates determined by the individual banks’ policies.
Further, it is crucial to note that for obtaining the bank specific details applicants are suggested to refer to the official websites of the respective banks and get in touch with their customer support staff.
(Note: Using a credit card carries its own set of risks)
