KCC Rules Changed: Why RBI’s 4 Big Decisions Are a Relief for Millions of Farmers

New Delhi: This news is about major changes in the Kisan Credit Card Scheme (KCC) by the Reserve Bank of India (RBI), on the draft of which feedback has been invited. The proposed changes aim to make the Kisan Credit Card more useful, transparent, and comprehensive so that farmers can get the appropriate amount of loan on time.

Will the new draft provide better loan coverage to farmers?

RBI has proposed to improve the coverage and operations of the Kisan Credit Card in its draft guidelines. Under this, it is suggested to fix the loan withdrawal limit as per the estimated cost of the crop so that the farmer can get sufficient money as per the actual need. This is expected to reduce the problem of inadequate credit to a great extent.

How can the loan tenure change?

The proposed draft also includes a plan to standardize crop rotations. According to this, 12-month cycles have been fixed for quick-maturing crops and 18-month cycles for long-duration crops. Accordingly, it is now proposed to increase the total tenure of KCC to six years, which will provide flexibility in loan repayment to farmers with long crop cycles and will reduce the pressure of timely repayment.

What will be the impact on the loan limit?

The draft guidelines propose that the loan limit for farmers under KCC should be decided according to the crop-specific cost. This means that now this limit will not just be a general limit fixed by the bank but will be fixed according to each crop and its cost. This will make it easier for farmers to get loans as per their actual financial needs.

Will technical and research expenses also be included?

RBI is also suggesting to include technical consumption in the list of loanable expenses in the proposed draft. This will also include costs related to soil testing, weather forecasting, certification of organic/good agricultural practices, etc. This will help farmers adopt advanced agricultural techniques and increase agricultural production capacity.

Who has sought feedback and suggestions?

RBI has prepared draft guidelines and sought comments from banks, farmers, financial institutions, and other stakeholders by March 6, 2026. Final changes will be made based on these suggestions. The draft will be applicable to all major banks and rural financial institutions. Earlier, in the Monetary Policy Week, RBI had also expressed the need for reforms in the agricultural sector.

These proposed changes are being considered as a step taken to modernize and make farmer-friendly the structure of the three-decade-old Kisan Credit Card Scheme. If these changes are implemented, the KCC scheme may prove to be more effective in providing timely and adequate loans to the farmers as per their needs.