RBI Kisan Credit Card Revision: New KCC Rules Effective January 1, 2027; Check Loan Limits, Collateral Norms and Eligibility
The Reserve Bank of India (RBI) has issued the final Kisan Credit Card (KCC) Directions, 2026, introducing a revised framework for agricultural lending that will come into effect from January 1, 2027. The new guidelines will apply to Commercial Banks, Small Finance Banks, Regional Rural Banks and Rural Co-operative Banks offering credit under the KCC scheme.
New Delhi, June 21: The Reserve Bank of India (RBI) has issued the final Kisan Credit Card (KCC) Directions, 2026, introducing a revised framework for agricultural lending that will come into effect from January 1, 2027. The new guidelines will apply to Commercial Banks, Small Finance Banks, Regional Rural Banks and Rural Co-operative Banks offering credit under the KCC scheme.
The central bank said the final directions incorporate stakeholder feedback received after draft guidelines were released for public consultation in February 2026. Existing KCC loans sanctioned before January 1, 2027, will continue under current norms until their maturity or renewal. RBI Repo Rate 2026: Reserve Bank of India Holds Repo Rate at 5.25% Amid Rising Global Uncertainty.
What Is Changing Under the RBI Kisan Credit Card Revision?
The revised framework aims to ensure adequate and timely credit support for farmers engaged in agriculture and allied activities through a simplified and standardised credit facility.
Under the new rules, banks will provide KCC loans as a composite credit facility with a tenure of six years, covering both working capital and investment requirements.
Crop Seasons Standardised
RBI has standardised crop seasons under the KCC scheme to bring uniformity in lending and repayment.
- Short-duration crops: Up to 12 months from sowing to marketing
- Long-duration crops: More than 12 months and up to 18 months
The crop season will be considered the period from cultivation to harvesting and marketing of produce.
What Expenses Will KCC Loans Cover?
The revised KCC framework will provide credit for:
- Crop cultivation
- Animal husbandry, fisheries, aquaculture, sericulture, lac culture and beekeeping
- Post-harvest and post-production expenses
- Farmer household consumption needs
- Maintenance of agricultural assets
- Crop, health, accident and asset insurance
- Produce marketing loans
- Agricultural and allied sector investments
Collateral-Free Loan Limits
RBI has retained collateral-free lending for agricultural loans, including allied activities, up to INR 2 lakh per borrower.
For loans exceeding INR 2 lakh, banks will determine collateral and margin requirements based on their internal credit policies and RBI regulations.
The central bank clarified that voluntary pledging of gold or silver as collateral will not be treated as a violation of collateral-free lending norms.
In cases where crops or stock are hypothecated under tie-up recovery arrangements, banks may waive collateral requirements for loans up to INR 3 lakh.
RBI also said it is not considering any further increase in the collateral-free limit at present, noting that the threshold was revised in December 2024.
Who Is Eligible?
The KCC scheme will continue to cover:
- Owner cultivators
- Tenant farmers
- Oral lessees
- Sharecroppers
- Self-Help Groups (SHGs)
- Joint Liability Groups (JLGs)
Repayment periods will be linked to crop seasons or cash flows generated from allied agricultural activities.
When Will the New Rules Take Effect?
The RBI Kisan Credit Card Revision 2026 will take effect from January 1, 2027. All KCC loans sanctioned after this date will be governed by the new directions, while existing loans will continue under the earlier framework until renewal or maturity.
(The above story first appeared on LatestLY on Jun 21, 2026 01:28 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
