The Government has taken several steps to facilitate credit access to farmers in the country.

RBI vide Circular dated February 7, 2019 raised the limit for collateral-free agriculture loans from Rs. 1 lakh to Rs. 1.6 lakh. Further, RBI vide their circular dated June 27, 2014, has advised banks and financial institutions to include in their credit appraisal processes/loan policies, suitable provisions for obtaining Credit Information Reports (CIR) from one or more Credit Information Companies (CICs) so that the credit decisions are based on information available in the system.

Department of Financial Services vide its letter dated 04.02.2019 has issued advisory to all the banks to waive the processing, documentation, inspection, ledger folio charges and all other service charges for KCC/crop loans upto Rs. 3 lakh, keeping in view the hardship and financial distress of small and marginal farmers.

The Kisan Credit Card (KCC) Scheme ensures easy credit access for various farmer categories, including owner cultivators, tenant farmers, sharecroppers, and more. The KCC scheme provides for issue of ATM enabled RuPay Debit Card, inter alia, with facilities of one-time documentation, built-in cost escalation in the limit, and any number of drawals within the limit, etc. The KCC facility itself is an overdraft facility from which withdrawals can be made through RuPay Debit Card upto the sanctioned limit.

As also informed by banks, crop loans are assessed based on the land area, crops grown and scale of finance decided by the District Level Technical Committee (DLTC)/ State Level Bankers’ Committee (SLBC). No guideline for providing overdraft facility against Aadhaar card is available. However, after restructuring of existing KCC loans due to bad weather, etc., as decided by State Govt. / SLBC, farmers are further allowed to take need-based loans as per eligibility criteria of the Bank.

The above information was provided by UNION MINISTER OF STATE FOR FINANCE, DR. BHAGWAT KARAD, while giving a written reply to an unstarred question in Lok Sabha today.

Kisan Credit Card access expanded: fee waivers, CIR-based appraisals and overdraft features streamline farmer credit access. RBI raised the collateral-free agriculture lending ceiling and encouraged use of Credit Information Reports in bank appraisals, while the Department of Financial Services advised waiving processing and service charges for smaller Kisan Credit Card and crop loans. The Kisan Credit Card operates as an overdraft with one-time documentation, built-in limit escalation, multiple drawals and ATM-enabled RuPay cards; loan assessment follows land, crop and scale of finance set by District Level Technical Committees or State Level Bankers' Committees, and restructuring permits further need-based loans under bank eligibility.