RBI revises Kisan Credit Card norms, standardises crop season definition
Reserve Bank of India [Commercial Banks – Kisan Credit Card (KCC) Scheme] The instructions will be valid from January next year, 2026.
The guidelines have been issued 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 procedures, the RBI said.
The definition of crop seasons has been changed to comply with Income Recognition and Asset Classification (IRAC) norms.
“For the purposes of the KCC Scheme, cropping seasons shall be standardized at twelve months for short-duration crops and eighteen months for long-duration crops,” the instructions read. It was said.
‘Crop season’ refers to the period from growing to harvesting and marketing of crops.
In February, the central bank had issued draft instructions on the Revised Kisan Credit Card (KCC) Scheme to seek feedback from the public and stakeholders. The RBI rejected proposals to increase the unsecured limit, stating that it was recently improved in December 2024 and 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 allied activities, up to Rs 2 lakh per borrower.
However, voluntarily providing gold and silver collateral up to the unsecured limit in agricultural loans will not be considered as a violation of the rules regarding providing unsecured loans to the agricultural sector.
Additionally, banks must decide collateral security and margin requirements for loans above Rs 2 lakh as per their credit policies and in accordance with the RBI guidelines issued from time to time.
As per the latest norms, in case of KCC loans against crop/stock mortgages and with tying arrangements for recovery, banks can waive security deposit for loans up to Rs 3 lakh.
It was also stated that banks should review and renew short-term limits for crop cultivation and related activities in accordance with their credit policies.
