Government has initiated multiple schemmes to support the farmers financially. Kisan Credit Card is one of those initatives by the goverment to provide support to them. Credt means an amount of money which you have to return. In case, if a farmmer failed to repay his Kisan Credit Card debt, what can be happened? Let’s know the details.
What is Kisan Credit Card?
Kisan Credit Card (KCC) is a scheme that allows farmers to obtain loans from banks at a very low interest rate. This loan is available for agricultural needs such as seeds, fertilizers, pesticides, irrigation, or small equipment. This scheme was launched in 1998 to help farmers access loans directly from banks, eliminating the need for financial assistance. This card allows farmers to withdraw cash or pay for their farming expenses directly from their bank accounts. Under this scheme, farmers can generally easily obtain loans ranging from ₹50,000 to ₹3 lakh. This amount can also increase depending on the farmer’s needs and land area.
The loan repayment period depends on the crop cycle, i.e., depending on the Rabi or Kharif season, and typically takes 6 months to 1 year. If the farmer repays the loan on time, they also receive a 2% to 3% interest discount. This means that if you received a loan at 7%, the interest rate will be reduced to 4% after the discount.
What happens if you cannot repay the loan?
If a farmer doesn’t repay the loan on time, the bank first sends several reminders and notices. If payments remain unpaid for 90 consecutive days, the bank declares the account a NPA (Non-Performing Asset). This means the bank believes it’s unlikely to recover the money.
The bank then begins the recovery process, first attempting a settlement, then issuing a legal notice, and finally, the process of land seizure may be initiated.The bank or cooperative sends a recovery notice to the farmer. If the farmer still doesn’t pay after receiving the notice, the bank refers the matter to the tehsildar or district administration.
The Tehsildar considers this amount as “revenue arrears” and initiates recovery proceedings. If the situation persists, the administration resorts to land seizure, meaning temporary confiscation of the land.