RBI revises Kisan Credit Card norms, standardises crop season definition

New Delhi: The Reserve Bank of India (RBI) on Friday revised the Kisan Credit Card (KCC) Scheme, standardising the definition of crop seasons to ensure uniformity in sanctioning of loans and repayment schedules.

The Reserve Bank of India [Commercial Banks - Kisan Credit Card (KCC) Scheme] Directions, 2026, will be applicable from January next year.

Follow The PSUWatch Channel on WhatsApp

RBI said the directions are being issued with a view to laying 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 that requires simple and standard procedures.

The definition of crop seasons has been modified to align with the Income Recognition and Asset Classification (IRAC) norms.

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

'Crop season' means the period from the raising of crops to their harvesting and marketing.

In February, the central bank had issued draft directions on Revised Kisan Credit Card (KCC) Scheme for feedback from the public and stakeholders.

The RBI rejected suggestions to increase the collateral-free limit, noting that it was recently enhanced in December 2024 and that no further increase is envisaged at this stage.

On collateral security and margin, the RBI said banks should waive collateral security and margin requirements for agricultural loans, including those for allied activities, up to Rs 2 lakh per borrower.

Follow PSU Watch on LinkedIN

"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," it said.

Also, banks should decide the collateral security and margin requirements for loans above Rs 2 lakh as per their credit policy and in adherence with RBI guidelines issued from time to time.

In case of KCC loans against the hypothecation of crops/stock and involving tie-up arrangements for recovery, banks may waive collateral security for loans up to Rs 3 lakh, the latest norms said.

It also said banks should undertake review and renewal of the short-term limits for crop cultivation and allied activities as per their credit policy.

(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated)