Explanation:

Kisan Credit Cards are offered to farmers in India in order to enable them to access affordable credit for farmers. Reserve Bank of India (RBI), along with National Bank for Agriculture and Rural Development (NABARD) initiated the conception of Kisan Credit Cards (KCC) in 1998-99, in order to assist agriculturists to have easily accessible cash credit facilities.

• This card allows farmers to obtain timely and adequate credit without any hassles such as the repeated credit screening processes undertaken by banks. Some of the highlights of the Kisan Credit Cards is that it provides flexibility in terms of repayment, which can be rescheduled in the event of unforeseen incidents like a bad crop season, with term extensions for a period of up to four years, and so on. Kisan credit card is valid for up to five years and is dependent on the annual renewals. The farmers can access the credit through card withdrawals or through bank withdrawal slips, and also have a passbook to record their transactions.

• Under this scheme, farmers can withdraw the loan amount in form of cash withdrawals using withdrawal slips and the Kisan credit card-cum-passbook. Kisan Credit Card holders who have a credit limit of Rs. 25,000 can also avail cheque books.

Kisan Credit Card Loan Interest rate 2022-2023, 2023-24: Farmers availing short-term loans through Kisan Credit Card (KCC) will have to pay only 4% interest if they repay the amount within one year from the date of disbursement, according to an RBI notification. 

• The Reserve Bank of India (RBI) on Wednesday (November 23) announced the interest rate for short-term loans up to Rs 3 lakh through Kisan Credit Cards (KCC).

Note: Interest rate

• The interest rate on short-term loans up to Rs 3 lakh through KCC will be 7% for farmers. The rate of interest subvention for lending institutions would be 1.5%. These rates will apply for both FY 2022-23 and FY 2023-24.

3% discount!

• An additional interest subsidy of 3% would be provided to farmers for repaying the loan in time. The effective rate of interest for such farmers, therefore, would be just 4%.