Summary: Reserve Bank of India [Commercial Banks – Kisan Credit Card (KCC) Scheme] Directions, 2026 dt 21th Jun 2026 prescribe a comprehensive Kisan Credit Card (KCC) Scheme applicable to all commercial banks in India, excluding overseas branches, with a tenure of six years. The scheme covers owner cultivators, tenant farmers, oral lessees, sharecroppers, Self-Help Groups (SHGs), and Joint Liability Groups (JLGs). It provides both short-term revolving cash credit and long-term loans for agriculture and allied activities, including dairy, fisheries, poultry, sericulture, beekeeping, post-harvest expenses, insurance, technology adoption, and investment needs. Credit limits are determined based on the Scale of Finance (SoF), with additional allocations for post-harvest expenses, household consumption, maintenance, technology services, and insurance. The scheme introduces Flexi KCC for marginal farmers, collateral-free loans up to Rs. 2 lakh (and up to Rs. 3 lakh in specified cases), simplified documentation, flexible treatment for tenant farmers and sharecroppers, optional insurance, and separate accounting of short-term and long-term credit. The Reserve Bank retains powers to grant exemptions and issue binding clarifications.
Applicability of the scheme:
- Applicable to all Commercial Banks (hereinafter collectively referred to as ‘banks’ and individually as a ‘bank’)
- Not be applicable to operations of overseas branches of Indian banks
Tenure of the scheme:
- tenure of six years
Eligibility of the scheme:
(1) Farmers (individual / joint borrowers), who are owner cultivators;
(2) Tenant farmers, oral lessees, and sharecroppers; and
(3) Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) of farmers / cultivators including tenant farmers, oral lessees, and sharecroppers.
Purpose/Benefit of expenses under the scheme:
- Rearing of dairy animals / poultry birds / small ruminants; illustratively, cattle, buffalo, camel, yak, mithun, goat, sheep, pig, rabbit, etc.
- Rearing and capturing of fish / shrimp / other aquatic organisms; illustratively, fish culture, composite / integrated fish culture, polyculture, raceways fish culture, sea cage culture, cage / pen culture in reservoir, wetland fisheries, ornamental fish farming, fish angling, fish seed rearing, saline water aquaculture (shrimp / fish), shrimp culture, prawn culture, pearl culture, crab culture, seaweed cultivation, aquaponics, bio-floc fish farming, bivalve culture and brackish water culture, etc., and other production related activities concerned with inland / marine fisheries and aquaculture.
- Production related activities concerned with sericulture, lac culture, beekeeping, and similar other allied activities.
- Post-harvest / post- production expenses;
- Consumption requirements of farmer household
- Expenses for maintenance of assets related to agriculture and allied activities, soil testing, real time weather forecasts / other technological support services and organic / good agricultural practices or similar relevant certification
- Crop insurance, accident insurance, health insurance and asset insurance
- Produce marketing loans
- Investment requirements for agriculture and allied activities
It gives both short term and long term.
The short-term credit limit fixed for the sixth year together with the estimated long-term credit limit shall be the Composite Maximum Permissible Limit
The short-term component of the KCC limit for the purposes of crop cultivation and allied activities shall be in the nature of revolving cash credit facility.
Fixation of Drawing Limit
(1) The drawing limit for each crop season shall be the sum total of the following:
(i) Scale of Finance (SoF)
(ii) 10 % of (i) above towards post-harvest expenses and consumption requirements of household
(iii) 20% of (i) above towards repairs and maintenance of farm assets, soil testing, weather advisory and agri-extension service subscriptions, software and digital advisory platforms fees, drone-based crop health surveys and spraying services, remote sensing and satellite-based crop monitoring services, other technological support services, organic / good agricultural practices certification and similar other services, in the nature of working capital expenses.
(iv) Premium for crop insurance, accident insurance, health insurance and asset insurance, if any.
(2) In case the cropping pattern adopted by the farmer changes for any subsequent season, the drawing limit shall be reworked by taking into consideration the crops proposed to be grown.
(3) In situations where the SoF has not been notified by SLTC for a particular crop season, at the time of the farmer availing the loan, the bank shall consider applying a 10 per cent notional hike over the SoF applicable for the previous season and determine the drawable limit for the ensuing season. However, in cases where the SoF has been notified but not revised, banks shall adopt the existing SoF.
(4) In respect of crops not covered in the SoF finalised by the SLTC / DLTC of the respective State, loans extended shall be outside the KCC framework. However, efforts must be made to get the SoF of such crops notified by the SLTC / DLTC.
(5) The KCC credit limit shall be rounded off to the nearest ₹1,000.
(6) At the time of sanction, the maximum permissible limit (MPL) for the short-term crop loan shall be arrived at on a notional basis by adding 10 per cent to the limit of the previous crop season, from the second crop season onwards. In case the drawing limit exceeds the MPL in any crop season / year, the MPL shall be reassessed at the time of review.
(7) Marginal farmers shall also be eligible for a flexible credit limit of ₹10,000 to ₹50,000 (as Flexi KCC) as per assessment of the bank without relating it to the value of the land. The credit limit shall be based on crops grown, post-harvest warehouse storage related credit needs, other farm expenses, consumption needs and investment requirements for agriculture and allied activities. The composite KCC limit is to be fixed for a period of six years on this basis. Wherever higher limit is required due to change in cropping pattern and / or SoF, the limit may be arrived at as per the estimation indicated at paragraphs 13(1) to 13(6).
Collateral Security and Margin
- Banks shall waive collateral security and margin requirements for agricultural loans including loans for allied activities up to ₹2 lakh per borrower. However, voluntary pledge of gold and silver as collateral for agriculture loans up to the collateral-free limit will not be considered as a violation of the guidelines on collateral-free lending to the agriculture sector. Banks shall obtain and retain explicit declaration from the borrower in such cases. RBI guidelines on collateral free limit pertain only to secondary collateral and not primary security or assets financed by the loan.
- Banks shall decide the collateral security and margin requirements for loans above ₹2 lakh as per their credit policy and in adherence with RBI guidelines issued from time to time.
- In case of KCC loans against hypothecation of crops / stock and involving tie-up arrangements for recovery, banks may waive collateral security for loans up to a limit of ₹3 lakh.
Segregation of Limits
Considering the different interest rates and repayment schedules applicable to various types of credit provided under KCC, the facility may be divided into sub-limits for short-term cash credit limit-cum-savings accounts for crop cultivation and allied activities separately, and long-term loan for agriculture and allied activities. For operational convenience, these sub-limits shall be maintained as separate loan accounts under the composite KCC facility.
Other instructions
- Banks shall obtain a one-time documentation including land record / tenancy certificate / equivalent certificate as per their credit policy at the time of application for fresh loan. During the tenure of the facility, at the time of each review, the bank shall obtain declaration from the borrower(s) regarding proposed activity / activities.
- In case of loans to sharecroppers and oral lessees, banks shall accept certificates provided by local administration / panchayati raj institutions regarding the cultivation of crops by such borrowers. Where there are difficulties in getting certification regarding identity and occupational status of sharecroppers and oral lessees, banks shall accept an affidavit submitted by such borrowers giving their occupational status (i.e., details of land tilled / crops grown), for loans up to ₹50,000.
- Processing fees, inspection charges and other charges shall be as per the bank’s policy on applicable charges and applicable regulatory guidelines, if any.
- The KCC holder will have the option to avail any type of crop insurance, asset insurance, accident insurance (including Personal Accident Insurance Scheme) or health insurance and may pay the premium through the KCC account. Beneficiaries shall be made aware of the insurance covers available. Their explicit consent shall be obtained, at the application stage itself if the premium is to be paid through the KCC account.
- In case insurance (crop insurance, asset insurance and personal accident insurance) is funded under the KCC facility, the same shall be assigned in favour of the lending bank.
Exemptions
The Reserve Bank may, if it considers necessary for avoiding any hardship or for any other just and sufficient reason, grant extension of time to comply with or exempt any regulated entity, from all or any of the provisions of these Directions either generally or for any specified period, subject to such conditions as the Reserve Bank may impose.
Interpretations
For the purpose of giving effect to the provisions of these Directions or in order to remove any difficulties in the application or interpretation of the provisions of these Directions, the Reserve Bank may, if it considers necessary, issue necessary clarifications in respect of any matter covered herein and the interpretation of any provision of these Directions given by the Reserve Bank shall be final and binding.
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