The Reserve Bank of India (RBI) has proposed significant changes to the Kisan Credit Card (KCC) scheme to expand credit coverage and modernise farm financing.
Key Proposals in the Draft Norms:
- The revised draft suggests including expenses related to agri-tech initiatives- such as soil testing, weather forecasting services, and organic certification-within the eligible components of farm loans.
- This move aims to support technology-driven and sustainable farming practices.
- In a major relief for borrowers, the RBI has proposed waiving collateral and margin requirements for agricultural and allied sector loans up to ₹2 lakh per borrower.
- This is expected to improve access to institutional credit, particularly for small and marginal farmers.
Revised Credit Limits and Tenure:
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Drawing limits under KCC will be aligned with the crop-wise scale of finance.
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A flexible credit limit ranging from ₹10,000 to ₹50,000 has been proposed for marginal farmers owning up to one hectare of land.
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Crop tenures have been standardised at:
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12 months for short-duration crops
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18 months for long-duration crops
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The overall validity of the KCC has been extended to six years.
Public Feedback Invited:
- The RBI has invited comments and suggestions on the draft guidelines until March 6, 2026.
- These reforms could strengthen rural credit delivery and make farm financing more inclusive and future-ready.