New Delhi: Who would believe that the credit card, an extremely popular and inevitable part of modern lifestyle will create the same effect in its rural avatar. The Kisan Credit Card which was launched in 1998-99 by the Government of India in consultation with the Reserve Bank of India (RBI) and National Bank for Agricultural and Rural Development (NABARD), is a huge hit with the farmers in India.

According to RBI, presently there are about 66.56 million Kisan Credit Cards in use across India, which have been issued by various banks. 8 million such credit cards were issued in 2005-06, while 2006-07 saw a slight decline, with 7.47 million Kisan credit cards. The average number of Kisan credit card issued during the past five years have been 9 million per year.

Kisan Credit Cards (KCC) scheme was started with the following features:

• Type of revolving cash credit facility with unlimited withdrawals and repayments.
• Meet the production credit need, cultivation expenses, and contingency expenses of the farmers.
• Limits based on the basis of operational land holding, cropping pattern and scale of finance. This limit is inclusive of 20% of production credit.
• Each withdrawal to be paid within 12 months.
• Card valid for 3 years subject to annual renewals.
• Credit limits can be enhanced depending on performance and needs.
• Rescheduling is also possible depending upon the situation. If for example the crops fail due to a natural calamity and the farmer is not able to repay his loan, then he could get an extension of up-to four years.
• Cash withdrawals through slips accompanied by card and passbook.
• A credit cum passbook would be issued.
• All branches engaged in agricultural lending could issue Kisan Credit Cards

All rural farmers having land and a good financial track record of 2 years are eligible for this scheme. However, new borrowers could also be included if they provide proof of operational land holding from the area Patwari. The farmer will be evaluated by the bank on financial grounds by looking at his past record with the bank and on personal grounds by looking at his reputation in the village. The credit limit under the card is fixed on the basis of the operational land holding.

A Kisan credit card once issue, is valid for a period of 3 years. Depending on the performance of the farmer the facility can be cancelled, extended or credit limits can be increased. The repayments of the amounts charged on this credit card have to be made within 12 months. There is no margin up to an amount of Rs. 10,000 and 15 to 25 percent collateral is charged for amounts over Rs. 25,000.

The RBI report also stated that Andhra Pradesh, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Orissa, Uttar Pradesh and Tamil Nadu showed better implementation of the scheme and accounted for more than 75 percent of the total credit cards issued by the banks. Goa, Jammu and Kashmir, Himachal Pradesh, Sikkim and other North Eastern states showed a relatively sluggish growth.