The Reserve Bank of India (RBI) has unveiled a revised framework for the Kisan Credit Card (KCC) Scheme, introducing key changes aimed at improving uniformity in agricultural lending and ensuring timely credit access for farmers. The updated guidelines, titled RBI Commercial Banks – Kisan Credit Card (KCC) Scheme Directions, 2026, will come into force from January 1, 2027.
The new directions seek to create a comprehensive and standardized lending framework for farmers and borrowers engaged in agriculture and allied activities, while aligning operational practices across banks.
One of the most significant changes under the revised framework is the standardisation of the definition of "crop season." The RBI has aligned the term with the Income Recognition and Asset Classification (IRAC) norms applicable to banks.
Under the new definition, a crop season will begin with the cultivation of a crop and conclude after its harvesting and marketing. The move is expected to bring greater consistency in loan sanctioning, repayment schedules, and asset classification across the banking sector.
The revised norms were finalised after the RBI reviewed stakeholder feedback on draft guidelines released earlier this year.
The central bank has decided against increasing the collateral-free loan limit under the KCC scheme, noting that the threshold was already enhanced in December 2024.
However, banks have been directed to waive collateral security and margin requirements for agricultural and allied activity loans up to ₹2 lakh per borrower. For loans exceeding this amount, lenders may determine collateral and margin requirements based on their internal credit policies and prudential norms.
Additionally, for KCC loans secured through hypothecation of crops or stock and backed by recovery tie-up arrangements, banks may waive collateral requirements for loans up to ₹3 lakh.
The revised guidelines also require banks to periodically review and renew short-term credit limits sanctioned for crop cultivation and allied agricultural activities. These reviews will help ensure that credit limits remain aligned with farmers' evolving financial requirements and changing agricultural conditions.
The RBI’s updated KCC framework is aimed at streamlining agricultural lending practices while improving access to institutional credit. By standardising crop season definitions, clarifying collateral norms, and mandating periodic credit reviews, the new guidelines are expected to bring greater consistency, transparency, and efficiency to the agricultural credit ecosystem from 2027 onward.
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Published on: Jun 22, 2026, 11:24 AM IST
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