On February 12, 2026, the Reserve Bank of India (RBI) issued a comprehensive set of draft guidelines aimed at revamping the Kisan Credit Card (KCC) scheme. The primary objective is to streamline the loan process, ensure uniform repayment schedules across the country, and better align credit with the actual needs of modern farming.
Here is a breakdown of the major changes proposed by the RBI:
1. Linking Tenure to Crop Duration
The most significant shift is the standardization of crop cycles to bring uniformity in how loans are sanctioned and repaid:
Short-Duration Crops: Standardized to a 12-month cycle.
Long-Duration Crops: Standardized to an 18-month cycle.
Previously, these cycles often varied by region or bank, leading to confusion for farmers regarding repayment deadlines.
2. Extension of KCC Tenure to 6 Years
To better accommodate long-duration crops and provide more stability to farmers, the overall validity/tenure of the KCC facility has been extended from the existing 5 years to 6 years. This allows farmers a longer operating cycle before the entire limit needs a formal re-assessment.
3. Higher Credit Limits (Scale of Finance)
The RBI has proposed that the drawing limits under KCC be strictly aligned with the Scale of Finance (SoF) for each crop season. This ensures that farmers receive an amount that accurately reflects the current cost of cultivation, including inflation in seeds, fertilizers, and labor.
4. Inclusion of “Agri-Tech” Expenses
In a move to modernize Indian agriculture, the RBI has expanded the list of eligible expenses under KCC. Farmers can now use their credit for:
Soil testing and real-time weather forecasts.
Technological interventions like modern machinery and agri-tech solutions.
Certifications for organic or “Good Agricultural Practices” (GAP).
These expenses will be covered within the existing 20% additional component allowed for the “repairs and maintenance” of farm assets.
5. Interest Rates and Subsidy
The core financial benefits of the scheme remain intact:
7% Interest Rate: Available for loans up to ₹3 lakh.
Prompt Repayment Incentive: An additional 3% subsidy for farmers who pay back on time, bringing the effective interest rate down to 4%.
Increased Limit: There is a proposal to eventually raise the subsidized loan limit from ₹3 lakh to ₹5 lakh to support larger-scale farming needs.
6. Public Feedback
The RBI has invited comments and feedback on these draft directions from the public and stakeholders until March 6, 2026.
Read More: RBI’s KCC Overhaul Why Your Kisan Credit Card Tenure is Now 6 Years
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