RBI Revises Kisan Credit Card Norms

The Reserve Bank of India issued the final revised Kisan Credit Card framework on 19 June 2026. The revised directions will apply from 1 January 2027, after public consultations on draft directions issued in February 2026.

Kisan Credit Card Framework

The Kisan Credit Card scheme provides short-term credit to farmers and borrowers engaged in agriculture and allied activities. It was introduced to provide timely institutional credit for crop production, post-harvest expenses, and working capital needs in the farm sector.

Revised Crop Season Norms

The revised framework standardises crop seasons at 12 months for short-duration crops and 18 months for long-duration crops. These periods align with Income Recognition and Asset Classification norms used by banks for loan classification and repayment monitoring.

Collateral and Margin Rules

Banks will continue to waive collateral security and margin requirements for agricultural loans, including allied activities, up to ₹2 lakh per borrower. Voluntary pledging of gold and silver as collateral for agriculture loans up to the collateral-free limit of ₹2 lakh will not count as a violation of collateral-free lending guidelines. For KCC loans above ₹2 lakh, banks will decide collateral and margin requirements under their credit policies and RBI guidelines. The RBI did not accept proposals to raise the collateral-free lending threshold, which was revised in December 2024.

Credit Limit for Marginal Farmers

Marginal farmers holding up to one hectare will be eligible for a flexible credit limit of ₹10,000 to ₹50,000. The limit will depend on bank assessment and will not be linked to land value.

Important Facts for Exams

• The Kisan Credit Card scheme is a banking instrument for agricultural credit in India.
• Income Recognition and Asset Classification norms are used by banks to classify loan assets as standard, sub-standard, doubtful, or loss assets.
• Collateral-free lending up to ₹2 lakh applies to agricultural loans, including allied activities.
• Marginal farmers are generally defined in Indian agricultural policy as farmers holding up to one hectare of land.

Transition Provisions

KCC loans sanctioned before 1 January 2027 will continue under the existing KCC guidelines until maturity or the next renewal. The revised framework will then apply to fresh sanctions and renewals covered by the new directions.