Why in the news
After stakeholder feedback on practical and technology difficulties, the RBI pushed back the start of its revised Kisan Credit Card rules by six months while releasing the final version of the KCC Directions, 2026.
Key facts
- Dates: draft on 12 February 2026; final directions announced 19 June 2026; original start 1 July 2026; new start 1 January 2027.
- Applies to: commercial banks, SFBs, RRBs and rural co-operative banks.
- Transition: KCC loans sanctioned before 1 January 2027 follow existing guidelines until maturity or next renewal; later ones fall under the new Directions.
- Features: composite credit facility with a 6-year tenure; sub-limits allowed for operational ease; repayment tied to crop season or cash flow of allied activities.
- Collateral: Rs 2 lakh per borrower without collateral; Rs 3 lakh with hypothecation and tie-up; voluntary gold or silver pledge is not a breach; above Rs 2 lakh, banks follow their credit policy.
What RBI accepted and rejected
| Accepted | Not accepted |
|---|
| Crop seasons of 12 and 18 months, in line with IRAC norms | Higher Flexi KCC limit |
| References to District Level Technical Committees | Lending beyond notified Scale of Finance |
| Indicative list of technological interventions | Higher collateral-free limit (last revised December 2024) |
| Flexi KCC for allied activities | Renewal based on interest servicing alone |
| Credit limits rounded to nearest Rs 1,000 | One consolidated limit instead of sub-limits |
| Borrower consent for insurance premium at application | |
Clarifications
- If Scale of Finance is not revised for a year, banks keep the current one with no automatic rise in limits; SoF is set by SLTC or DLTC.
- Term loans longer than 6 years are separate facilities outside KCC.
- Banks may keep separate accounts for working capital and investment parts.
- Outside scope: interest subvention under MISS, cooperative reporting to credit information companies, and KCC portability.
About the KCC scheme
- Launched in August 1998 on the idea of NABARD, following the R.V. Gupta Committee, to give farmers timely institutional credit instead of moneylender dependence.
- Eligible: owner cultivators, tenant farmers, oral lessees, sharecroppers, SHGs and JLGs.
- Covers crop costs, post-harvest needs, working capital, investment credit and allied activities such as animal husbandry, fisheries, aquaculture, sericulture, lac culture and beekeeping; limited household consumption.
- MISS: effective rate 4% for prompt payers (card rate 9%, 2% subvention to banks, 3% prompt repayment incentive); eligible loan limit raised from Rs 3 lakh to Rs 5 lakh in Budget 2025-26.
- Insurance: Rs 50,000 for death or permanent disability, Rs 25,000 for other risks, with PMFBY linkage.
- Scale of Finance is the per-unit credit limit for crops, fixed yearly by DLTCs; drawing limit is SoF times area plus 10% for household and post-harvest costs.
KCC milestones
| Year | Event |
|---|
| 1998 | Scheme launched |
| 2004 | Investment credit and non-farm allied activities added |
| 2006-07 | Interest Subvention Scheme began |
| 2018-19 | Animal husbandry and fisheries brought in |
| December 2020 | PM Modi unveiled a revised KCC scheme |
| September 2023 | Kisan Rin Portal went live |
| June 2026 | Final KCC Directions, 2026 |
Exam angle
- New date 1 January 2027; collateral-free Rs 2 lakh.
- Crop season: 12 months short, 18 months long.
- Related terms: Flexi KCC, SoF, DLTC, MISS, IRAC.