The Reserve bank of India (RBI) has unveiled draft guidelines proposing significant changes to the Kisan Credit Card (KCC) scheme — a vital agricultural credit programme in India. These proposed reforms aim to expand loan coverage, simplify repayment terms, align credit to actual cultivation needs, encourage wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital finance, and support modern agricultural expenses for farmers and allied activities.
The RBI has invited public feedback on these draft directions until March 6, 2026 before finalising the new framework.
📌 1. Unified & Simplified Credit Framework
Under the proposed changes, RBI plans to consolidate existing KCC guidelines into a single, clearer framework covering:
- Commercial banks
- Small finance banks
- Regional rural banks
- Rural co‑operative banks
This unified approach is intended to make implementation smoother and reduce procedural confusion for both lenders and farmers.
🌾 2. Standardised Crop Seasons & Loan Repayment Cycles
To ensure uniformity and predictability in loan sanctions and repayments:
- Short‑duration crops will generally follow a 12‑month crop cycle.
- Long‑duration crops will follow an 18‑month cycle.
This standardisation helps align loan tenure and repayment schedules with actual agricultural cycles, reducing stress on farmers during harvest and repayment periods.
📅 3. Longer Loan Tenure — Up to Six Years
One of the most impactful proposals is to extend the maximum KCC loan tenure up to six years — especially for long‑duration crops and activities that require longer production cycles. Previously, KCC loans had shorter validity periods that often did not sync well with farmers’ earnings timelines.
📈 4. Credit Limits Tied to Real Cost of Cultivation
To ensure that farmers receive adequate and realistic funding, the proposed changes suggest that drawing limits under KCC should align with the official scale of finance for each crop season.
This means eligible credit will more accurately reflect true cultivation costs, inputs, labour, equipment, and associated farm needs — reducing the chance of under‑financing.
💻 5. Coverage for Modern Agricultural Expenses
The updated draft guidelines expand the scope of KCC funds to cover new‑age agricultural costs, such as:
- Soil testing and analysis
- Real‑time weather forecasting tools
- Certification costs for organic and good agricultural practices
These items will be included within the 20 % additional component for farm asset repairs and maintenance, boosting technology‑assisted and sustainable farming adoption.
💰 6. wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital Innovation — CBDC and UPI Integration
The draft directions also propose expanding how credit can be delivered and used:
- Central bank wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital currency (CBDC)/e‑Rupee may be used for KCC disbursements, enabling funds with programmable features that ensure money is spent only on specified farming needs.
- Banks will be required to enable KCC operations through UPI and other wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital channels, allowing real‑time wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital payments at agricultural markets (mandis) for seeds, fertilisers and more.
📊 7. Borrower Safeguards for Small & Marginal Farmers
The draft guidelines aim to better protect small and marginal farmers:
- For short‑term loans, total interest charged should not exceed the principal amount, shielding farmers from excessive cost burdens.
- Farmers may have the choice to voluntarily pledge assets like gold or silver for credit beyond certain limits without losing collateral‑free eligibility.
🏦 8. Flexible Limits for Marginal Farmers
For farmers with smaller land holdings (e.g., up to one hectare), the RBI’s draft suggests special flexible credit limits (e.g., ₹10,000–₹50,000) based on:
- Their land size
- Crops grown
- Working capital and investment needs
This flexibility aims to ensure that even tiny farmers can access appropriate credit without undue barriers.
📝 9. Public Feedback & Timeline
The RBI has invited stakeholders — including regulated entities, farmers’ associations and the public — to submit feedback on the draft guidelines until March 6, 2026. After considering comments, the final directions are expected to be published and implemented later in the year.
🌾 Why These Changes Matter for Farmers
If finalised, the proposed changes will:
- Make KCC loans more flexible and farmer‑friendly
- Align loan tenures with real agricultural cycles
- Expand credit to cover modern farming expenses
- Encourage digital finance adoption
- Provide safeguards for small, marginal and allied activity farmers
Overall, this overhaul could help enhance credit access, agricultural productivity and financial inclusion for millions of farming families across India.
📌 Conclusion: A New Era for Agricultural Credit in India
The RBI’s proposed changes to the Kisan Credit Card scheme are among the most significant in recent years. By rethinking loan tenures, repayment cycles, credit limits, wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital delivery and expense coverage — and making the scheme more inclusive and accessible — the reforms aim to support India’s agricultural sector more effectively in 2026 and beyond.
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