Kisan Credit Card Scheme - Interest Rate, Benefits, Limit and How to Apply

The Kisan Credit Card scheme provides timely loans and credit to farmers and agricultural workers, which helps them to fulfill their agricultural needs, in crop cultivation and other allied activities. 

Key Takeaways:

• Benefits: Provides Kisan credit card, loans and investment credit to farmers 
• Loan interest rate: 7% p.a. 
• Kisan credit card tenure: 5 years
• Kisan credit card limit: Based on land holdings, crops and purpose
• Application process: Through bank website or bank branch

What is Kisan Credit Card Scheme?

The Kisan Credit Card Scheme was introduced in 1998 to provide credit to farmers for agriculture inputs and production needs. Under this scheme, Kisan Credit Cards (KCC) are issued to farmers based on the holdings of land and crop cultivation of the farmers. The farmers can use the KCC to readily purchase agricultural inputs such as fertilisers, seeds, pesticides, etc., and also withdraw cash for production needs. 

KCCs are issued by Private Sector Scheduled Commercial Banks, Public Sector Banks, Small Finance Banks, Primary Agricultural Credit Society (PACS) ceded with Scheduled Commercial Bank (SCBs), Regional Rural Bank (RRBs), and Rural Cooperative Banks.

In 2004, this scheme was expanded to include investment credit and allied activities. The Interest Subvention Scheme (ISS) began in 2006-07, offering KCC loans at 7% interest. In the Budget 2025-26, it was announced that the Modified Interest Subvention Scheme (MISS) variant offers 7% interest for short-term agriculture loans up to Rs.5 lakh through KCC. MISS covers activities like dairy, animal husbandry, and fisheries.

What is the Purpose of Kisan Credit Card Scheme?

The loans and credit granted under the Kisan Credit Card scheme can be used for the following purposes:

• To meet the short-term credit requirements for cultivating crops, including seasonal horticultural vegetable crops
• To meet the working capital needs or requirements of medium or long-duration crops, such as horticultural flowers, fruits, spices, plantation crops, aromatic plants and medicinal plants
• To meet post-harvest expenses and financing against e-Negotiable Warehouse Receipt (NWR)
• Produce a marketing loan
• To meet the consumption requirements of farmers’ household
• To meet the working capital requirements for the maintenance of farm assets
• To meet working capital requirements for maintenance activities allied to agriculture fisheries, dairy, poultry, mushroom, other ruminants, sericulture, beekeeping, etc.

What are the Types of Kisan Credit Card?

The following are the types of Kisan Credit Cards that can be issued by the banks to farmers:

• The Kisan Credit Card is a magnetic stripe card with PIN (Personal Identification Number) and an ISO IIN (International Standards Organization International Identification Number) to enable farmers access all bank ATMs and micro ATMs
• Where the banks want to use the centralised UIDAI biometric authentication infrastructure, debit cards with magnetic stripe, PIN and ISO IIN with UIDAI biometric authentication can be provided.
• KCC debit cards with magnetic stripes and only biometric authentication can be provided depending on the bank's customer base. 
• Banks can also issue EMV (Europay, MasterCard and VISA), a global standard for the interoperation of integrated circuit cards and RUPAY compliant chip cards with magnetic stripe, PIN and ISO IIN.
• Biometric authentication and smart cards follow the common open standards prescribed by IBA and IDRBT. This will enable farmers to transact seamlessly with input dealers and credit their sales proceeds to their accounts when they sell output at procurement centres, mandies, etc
• New KCCs must be issued as smart card cum debit card. Even at the time of renewal of existing KCCs, smart card cum debit card must be isssued to the farmers.
• Two seperate electronic cards can be issued for all new or renewed cards, until a composite card can be issued under a appropriate software to separately account transactions of the short term credit limit and the term loan limit under the KCC scheme. 

Kisan Credit Card Delivery Channels

The following delivery channels are available for the farmers to use Kisan Credit Card and transact their operations in their KCC account:

• Withdrawal through ATMs or Micro ATM
• Withdrawal through Business Correspondents (BCs) using smart cards
• PoS machine through input dealers
• Mobile Banking with IMPS capabilities or IVR
• Aadhaar-enabled cards

Interest Rate Under Kisan Credit Card Scheme

The interest rates of KCC loans are as follows:

• Interest rates for up to Rs.3 lakhs - 7% p.a. subject to the government providing interest subvention*
• Above Rs.3 lakhs- as applicable from time to time
• 3% p.a. interest subvention is provided under the Prompt Repayment Incentive (PRI) up to Rs.3 lakh. However, submission of Aadhaar details to the bank is mandatory to avail interest subvention.

*Note: The interest rates may vary from bank to bank. Though most banks provide an interest rate of 7%, it may increase to 13%. 

Benefits of Kisan Credit Card

The Kisan Credit Card limit is based on land holdings, crops and purpose. The limits are calculated as follows:

Short-term loan limit for the first year of crop cultivation for a single crop in a year

• Scale of finance for the crop decided by the District Level Technical Committee x Extent of area cultivated 
• + 10% of limit towards household, post-harvest or consumption requirements 
• + 20% of limit towards maintenance and repairs expenses of farm assets 
• + crop insurance and accident insurance including health insurance, Personal Accident Insurance Scheme (PAIS) and asset insurance

Loan limit for the second and subsequent years for crop cultivation

• First year limit for crop cultivation purposes 
• + 10% of the limit towards cost escalation or increase in the scale of finance for every successive year, i.e., 2nd, 3rd, 4th and 5th year 
• + estimated term loan component for the tenure of Kisan Credit Card, i.e., 5 years

Loan limit for cultivation of more than one crop in a year

• The limit will be fixed as above, depending upon the cultivated crops as per the proposed cropping pattern for the first year 
• + an additional 10% of the limit towards cost escalation or increase in the scale of finance for every successive year, i.e., 2nd, 3rd, 4th and 5th year
• However, if the cropping pattern adopted by a farmer is changed in the subsequent years, the limit will be reworked

Loan limit for investment for cultivating more than one crop in a year

The term loan for investment should be made towards the purchase of farm equipment, minor irrigation, land development and allied agricultural activities. 

The banks will fix the quantum of term credit and working capital limit for agricultural and allied activities based on the:

• Unit cost of the asset proposed to be bought by the farmer 
• The allied activities already in progress on the farm 
• The bank’s judgment for repayment capacity 
• Total loan burden on the farmer, including existing loan obligations 

Maximum permissible limit

• The Maximum Permissible Limit (MPL) is the short-term loan limit arrived for the 5th year 
• + the estimated term loan requirement will be treated as the Kisan Credit Card limit

Who Are Eligible for Kisan Credit Card?

• Farmers, whether individual or joint borrowers who are owner cultivators
• Tenant farmers, oral lessees and share croppers
• Self Help Groups (SHGs) and Joint Liability Groups (JLGs) of farmers, including share croppers, tenant farmers, etc

Online Application for Kisan Credit Card Scheme

The application process varies based on the bank. Here is the general process to apply for a Kisan Credit Card loan online:

• Visit the bank website or the bank’s mobile banking app where you want to apply for Kisan Credit Card loan. 
• Navigate to the ‘Agri Loans’ section and choose ‘Kisan Credit Card’.  
• Click on the ‘Apply’ option or ‘Download Application Form’. 
• Fill out the online/downloaded application form with the required details and click ‘Submit’ or submit it to the bank. 
• You will receive an application reference number. 

The bank will check the eligibility requirements and contact you within 3-4 working days to proceed with the process.

Offline Application for Kisan Credit Card Scheme

Follow the below process to apply for Kisan Credit Card scheme offline:

• Visit the bank branch where you want to apply for KCC scheme.
• Obtain the application form from the bank representatives.
• Filll out the application form, attach the required documents and submit it to the bank branch.
• The bank representatives will verify the form and process the loan amount.

Documents Required for Kisan Credit Card Scheme

• Kisan Credit Card loan application form
• Two passport-size photos
• Identity proof, such as an Aadhaar card, driving license, Voter ID, passport
• Address proof, such as an Aadhaar card, driving license
• Proof of landholding certified by the revenue authorities
• Cropping pattern or crop grown with acreage
• Security documents for loan limit above Rs.3 lakhs, if applicable
• Any other required document

As of 31 December 2024, a total of Rs.10.05 lakh crore has been given to farmers under the Kisan Credit Cards, benefitting 7.72 crore farmers. The Kisan Credit Card scheme immensely benefits farmers by providing loans and credit whenever they require it to undertake agricultural and allied activities. Its scope has also been extended to provide credit for investment purposes by a farmer to cultivate crops, thereby helping farmers obtain a quick amount for their farming activities.