Mumbai: The Reserve Bank of India (RBI) is planning to make big changes to the Kisan Credit Card (KCC) scheme. The aim is to increase farmer coverage, make the system easier to use and match farm loans with rising farming costs and new farming methods.
The KCC scheme is almost 30 years old. RBI reviewed the scheme and decided that updates are needed to suit current agriculture needs. The central bank is expected to release draft guidelines soon for banks.
The new rules will combine all old KCC instructions into one updated framework.
Key changes likely under new KCC rules
Standard crop season rules: RBI may create one uniform definition of crop seasons across India. This will help banks decide loan limits and repayment schedules more clearly.
Loan tenure may increase to six years: KCC validity may increase, giving farmers longer and more stable credit access. This will reduce the need for frequent renewals.
Loan limits linked to farming costs: Credit limits may be linked to Scale of Finance (SoF), which means loan amounts will match actual crop cultivation costs.
Agri-tech spending may be included: Expenses on modern farming tools, precision farming equipment and technology may become eligible under KCC loans.
Banking sector sees positive impact: Banking experts say RBI’s focus on rural credit and data-based lending will help banks expand lending while maintaining loan quality. Banks with strong rural presence may benefit from higher farm credit demand.
What is Kisan Credit Card scheme?
The KCC scheme started in 1998 based on a NABARD model. It gives farmers easy and flexible loans through one system.
It covers crop loans, post-harvest costs, marketing loans, household needs, working capital and agriculture investments.
The scheme is available for individual farmers, tenant farmers, sharecroppers, Self Help Groups and Joint Liability Groups.
What it means for farmers?
If approved, the new rules may make farm loans easier, more flexible and better matched to real farming costs. It may also support use of modern farming technology.
