Kisan credit card rules revised: RBI issues final framework for all banks

The Reserve Bank of India (RBI) has issued the final Kisan Credit Card (KCC) Directions, 2026 for Commercial Banks, Small Finance Banks, Regional Rural Banks, and Rural Co-operative Banks, laying down a revised framework for agricultural credit under the scheme.

The central bank had, on February 12, 2026, issued draft directions on the revised KCC scheme for public and stakeholder feedback. RBI said the feedback received on the draft directions has been examined and “consequent modifications, as deemed appropriate, have been suitably incorporated in the final Directions.”

Accordingly, RBI has now issued the final directions for all four categories of banks.

The directions will apply to loans sanctioned under the KCC scheme from January 1, 2027, while loans sanctioned before this date will continue under existing guidelines until maturity or renewal.

RBI said the framework is intended “to lay down the framework for adequate and timely credit support from the banking system under the KCC Scheme to meet the working capital and investment credit needs of borrowers engaged in agriculture and allied activities, through a composite facility, requiring simple and standard procedure.”

Crop season standardised

RBI has standardised crop seasons under the KCC scheme.

“For the purpose of the KCC Scheme, crop seasons shall be standardized at twelve months for short duration crops and eighteen months for long duration crops,” the directions said.

‘Crop season’ refers to the period from the raising of crops to their harvesting and marketing.

Short duration crops are those with an anticipated duration from sowing to marketing of up to twelve months, while long duration crops are those with a duration of more than twelve months and up to eighteen months.

What the KCC facility will cover

Under the revised framework, banks will extend credit under the KCC scheme as a composite facility with a tenure of six years. The facility will cover:

• Short-term credit for cultivation of crops

• Short-term credit for allied activities such as animal husbandry, fisheries and aquaculture, sericulture, lac culture and beekeeping

• Post-harvest and post-production expenses

• Consumption needs of farmer households

• Maintenance of agricultural assets and related expenses

• Crop, accident, health and asset insurance Produce marketing loans

• Investment needs in agriculture and allied activities

Collateral and lending norms

RBI has stated that banks shall waive collateral security and margin requirements for agricultural loans, including allied activities, up to ₹2 lakh per borrower.

However, voluntary pledge of gold and silver as collateral will not be treated as a violation of collateral-free lending norms.

For loans above ₹2 lakh, banks will decide collateral security and margin requirements as per their credit policy and RBI guidelines.

In cases involving hypothecation of crops or stock with tie-up arrangements for recovery, banks may waive collateral security for loans up to ₹3 lakh.

The central bank has also rejected suggestions to increase the collateral-free limit, stating that it was recently enhanced in December 2024 and “no further increase is envisaged at this stage.”

Eligibility and repayment

The directions cover farmers including owner cultivators, tenant farmers, oral lessees, sharecroppers, as well as Self-Help Groups (SHGs) and Joint Liability Groups (JLGs).

Banks will fix repayment periods based on the crop season or the cash flow of allied activities. The KCC facility may also be split into sub-limits for operational convenience, with separate accounts maintained for short-term and long-term components.

Banks have also been directed to review and renew short-term limits for crop cultivation and allied activities as per their credit policy.

Effective date

The directions will apply from January 1, 2027, while existing loans will continue under earlier norms until renewal or maturity.

The Master Direction also repeals earlier circulars related to the KCC scheme, as listed in the appendix.