A state in India is demanding that the central government upgrade its Kisan Credit Card so farmers may use it at ATMs and keep it longer before requiring a new one.
Rural and cooperative banks in various regions of India provide Kisan credit cards based on farmers’ land holdings so they may buy agricultural supplies such as seed, fertilizer and pesticides. Kisan cardholders also may secure cash advances for farming-related purchases, also at a low interest rate.
However, farmers must visit a bank to use their cards to receive a cash advance. To address the issue, S K Modi, the deputy chief minister of the state of Bihar, is pushing government officials to make the card usable at ATMs.
“The problem is that the farmers need to travel many miles to go to their banks, while ATMs are present even in the smaller villages now,” Modi said in a statement. “We don't want farmers harassed.”
In addition, Modi demanded that the validity of the Kisan cards be extended to five years instead of three to further support the growth of grassroots agriculture in India.
The Ministry of Finance and the Reserve Bank of India would have to sign off on either request, a spokesperson for the Ministry of Agriculture tells PaymentsSource. Neither has stated an opinion on the matter.
Farmers must repay their Kisan card loans within three years, and they may make any number of cash advances and purchases within a fixed limit based on the scale of their farm operations. They must pay back cash advances within 12 months. The cards impose annual interest rates of less than 5%.
Pallavan Grama Bank Pvt. Ltd., a regional rural bank, in September launched a trial to test a new mobile-based version of India’s Kisan credit card (
Proponents expect the service to reduce costs for banks that otherwise would have to send business correspondents to farms and for farmers that otherwise might have to visit a branch to secure a cash advance.
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