A very relieving and big news has come from the Reserve Bank of India (RBI) for crores of farmers of the country. The central bank has made a very big and important amendment in the existing norms of Kisan Credit Card (KCC) scheme to promote farming in the country and further strengthen the financial help to the farmers.
Under this new change made by RBI, now complete uniformity will be brought in the programs of loan sanctioning and repayment by banks. For this, the Reserve Bank has decided to make the old definition of crop season completely uniform. RBI (Commercial Banks KCC Scheme) Instructions 2026 will be implemented across the country with effect from the month of January next year. The central bank says that these new instructions are being issued to create a better framework for adequate and timely credit support to farmers from the entire banking system under the KCC scheme. Its direct objective is to easily fulfill all the working capital and investment loan requirements of the borrowers engaged in farming and other important related activities.
RBI made this big change in the definition of crop season
To make the scheme transparent, the Reserve Bank has modified the definition of crop season to be strictly in line with the stringent rules of Income Recognition and Asset Classification (IRAC). As per the new government instructions, now the maximum duration of crop season for short-term crops for the specific purpose of KCC scheme will be fixed at 12 months. Apart from this, for long-term crops, this period will be fixed at 18 months. Here it is very important to understand that crop season actually means the entire period from the beginning of sowing of the crop till its harvesting and its final marketing in the market. With the introduction of this rule, farmers will now be able to get adequate and proper time to repay the loan.
No increase in loan limit at present
Let us tell you that in the month of February this year, the Central Bank had issued a preliminary draft instruction on this revised KCC scheme, on which necessary suggestions and objections were sought from the general public and all concerned parties associated with the agriculture sector. During this period, many farmer organizations had given a big suggestion to further increase the limit of loan without collateral, but RBI has completely rejected this suggestion.
Explaining the reason behind this, RBI said that this limit of unsecured loan was increased significantly in December 2024 itself, hence at present no new proposal to increase it further is under consideration. However, the Reserve Bank has given another major relaxation in the interest of farmers. According to the new rule, if a farmer wants to pledge gold or silver with banks on his own free will to get an agricultural loan up to Rs 2 lakh, then it will not be considered a violation of the guidelines related to unsecured loans in the agriculture sector. This means that now farmers will be able to easily meet their farming needs through gold loan.
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