RBI Proposes New Framework to Modernise Kisan Credit Card Scheme

The Reserve Bank of India (RBI) has issued draft directions to revise and consolidate the Kisan Credit Card (KCC) scheme. The proposal seeks to bring agriculture and allied activities under a single framework.  

It plans to widen coverage, simplify procedures, and address new credit needs in the farm sector. The draft has been released for public comments. 

Banks Covered Under the Proposal 

The directions will apply to commercial banks, small finance banks, regional rural banks, and rural co-operative banks. The RBI has invited feedback from lenders, stakeholders, and members of the public.  

Comments can be submitted through the RBI website or by email. The last date for responses is March 6, 2026. 

Uniform Crop Cycle Definitions 

The draft proposes standard definitions for crop seasons to reduce variation in lending practices. Short-duration crops have been set at a 12-month cycle.  

Long-duration crops have been defined with an 18-month cycle. The change is meant to bring more consistency to loan sanctions and repayment schedules. 

6 Year Loan Tenure Proposed 

The RBI has also proposed extending the tenure of KCC loans to 6 years. The longer term is intended to better match repayment schedules with crop production timelines. This is expected to be more suitable for crops that take longer to harvest or generate income. 

Drawing Limits and Eligible Costs 

Under the draft, drawing limits will be linked to the scale of finance for each crop season. This is meant to show the actual cost of cultivation while sanctioning credit. The proposal also adds certain technology-related expenses as eligible components.  

These include soil testing, real-time weather information and certification for organic or good agricultural practices within the existing 20% additional provision. 

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Conclusion 

The draft follows the announcement made in the February monetary policy statement. The final directions will be issued after the RBI reviews the feedback received from stakeholders. 

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