Kisan Credit Card (KCC) Scheme 2026: 4 Big Changes in RBI Draft

India is an agriculture-based country, and a large part of our economy depends on farming. Providing timely and low-interest loans to farmers is a big responsibility of the government and the banking system. For this purpose, the Kisan Credit Card (KCC) Scheme was started.

Now, this scheme is going through a new phase of changes.

Recently, the Reserve Bank of India (RBI) has released a new draft to revise and combine the guidelines of the KCC scheme. The main aim of these proposed changes is:

• To give more facilities to farmers
• To make the loan process simple
• To provide loans as per real farming cost
• To include modern agriculture needs

If you are a farmer, involved in agriculture activities, or planning to take benefit of the KCC scheme, this detailed article is very important for you.

What is Kisan Credit Card (KCC) Scheme?

Kisan Credit Card (KCC) is a financial scheme under which farmers get easy and low-interest loans for:

• Crop production
• Agricultural investment
• Allied activities like dairy, animal husbandry, fisheries, etc.

Main Objectives of KCC Scheme

• To provide timely crop loans to farmers
• To free farmers from moneylenders and informal loans
• To provide working capital based on farming cost
• To increase agricultural production and strengthen rural economy

Now RBI has proposed 4 major changes to make this scheme more effective, transparent, and farmer-friendly.

4 Major Changes Proposed by RBI – Explained in Detail

1️⃣ Standardization of Crop Loan Period

What Change is Proposed?

RBI has proposed to standardize the crop loan sanction and repayment period to bring uniformity.

As per the new proposal:

• 🌾 Short Duration Crops – 12 months
• 🌳 Long Duration Crops – 18 months

What Was the Problem Earlier?

Earlier, different states and banks defined crop duration differently. Because of this:

• Farmers were confused about repayment time
• Banking process was not uniform
• Chances of delay and penalty increased

Benefits of This Change

✔ Clear timeline for farmers
✔ More transparency between bank and farmer
✔ Simple and organized repayment process
✔ Better loan planning as per crop cycle

This is a big step to make the KCC scheme more systematic and professional.

2️⃣ Proposal to Make KCC Validity 6 Years

What is the Proposed Change?

RBI has proposed to make the total validity of Kisan Credit Card up to 6 years.

Why Was This Needed?

Many crops and agriculture activities are long-term in nature, such as:

• Horticulture
• Fruit trees
• Sugarcane
• Plantation-based farming

In these activities, investment is high and returns take time. Farmers had to apply again and again for renewal, which was difficult.

Benefits of 6-Year Validity

✔ No need for frequent re-application
✔ Easy long-term planning
✔ Continuous financial support
✔ Better support for long-duration crops

This change will especially help farmers doing modern and high-investment farming.

3️⃣ Drawing Limit Based on Actual Crop Cost

What Was the Situation Earlier?

Earlier, the loan limit given under KCC was sometimes less than the actual farming cost. Because of this:

• Farmers had to borrow extra money
• They depended on private lenders with high interest
• Farming quality was affected

What is the New Proposal?

RBI has suggested that:

The drawing limit under KCC should be fixed according to the estimated cost of each crop season.

Benefits for Farmers

✔ Enough money for seeds, fertilizers, pesticides
✔ Coverage of labor and irrigation expenses
✔ Better quality farming
✔ Reduced dependency on moneylenders

This change is practical and based on real needs of farmers.

4️⃣ Inclusion of Modern and Technical Agriculture Expenses

Today, farming is not fully traditional. Use of modern technology is increasing fast. RBI has included important modern expenses under KCC.

Now These Expenses Will Also Be Covered:

• 🧪 Soil Testing
• 🌦️ Real-time Weather Forecast services
• 🌱 Organic Farming Certification
• 📜 Good Agricultural Practices (GAP) Certification

These expenses will be included in the additional 20% component available for repair and maintenance of agricultural assets.

Benefits of This Change

✔ Farmers will adopt modern technology
✔ Increase in productivity
✔ Promotion of organic and quality farming
✔ Better export-quality production

This is a big step towards digital and smart agriculture in India.

Through Which Banks KCC Scheme is Available?

The Kisan Credit Card scheme is implemented through:

• Commercial Banks
• Regional Rural Banks
• Rural Cooperative Banks

All these institutions must follow the new guidelines issued by RBI.

How to Give Suggestions on the Draft? (Last Date: 6 March 2026)

RBI has released this draft for public comments. Farmers, banks, financial institutions, and general public can give suggestions.

Ways to Submit Suggestions:

• Through RBI official website under the “Connect 2 Regulate” section
• By email (Mention in subject line):
  “Response to Draft Guidelines on Revisions (Including Type of Regulated Entity)”

📅 Last Date: 6 March 2026

Announcement by RBI Governor

These proposed changes were announced in February 2026 during the Monetary Policy Statement by RBI Governor Sanjay Malhotra.

Now the draft is released for public opinion before final approval.

Why These Changes Are Important for Farmers?

These proposed reforms will:

• Make loan process simple
• Provide loan as per actual farming cost
• Promote modern agriculture
• Support long-term crops
• Increase transparency and trust

This is not just a technical change. It is a major step towards strengthening the financial condition of farmers.

Conclusion: KCC Scheme Will Become More Strong

The Kisan Credit Card (KCC) Scheme is like a lifeline for Indian farmers. The 4 big changes proposed by RBI aim to make this scheme:

• More farmer-friendly
• More transparent
• Technically advanced
• More effective

If these changes are implemented, farmers will get timely and sufficient loans. This will increase productivity and give new strength to the agriculture sector.

If you are already taking benefit of KCC or planning to apply, understand these changes carefully and give your opinion before the deadline.

👉 Please share this article with your farmer friends so that every farmer can know about these important updates.

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