RBI Planning Changes in Kisan Credit Card Scheme, Farmers May Get Big Relief

The Reserve Bank of India (RBI) is planning major changes to the Kisan Credit Card (KCC) scheme to make farm loans simpler, more flexible, and easier for millions of farmers in India. The new draft rules will create a clear, simple system for farming and related activities, helping banks lend more easily.

Same Simple Rules for All Banks

The new rules will apply to:

• Commercial Banks
• Small Finance Banks
• Regional Rural Banks (RRBs)
• Rural Cooperative Banks

With one simple system for KCC loans, RBI wants to make sure that farmers across the country follow the same rules. This step is expected to reduce confusion and help banks reach more farmers under the KCC scheme.

The central bank has also suggested making crop seasons the same across the country. Short-duration crops will follow a 12-month cycle, and long-duration crops will follow an 18-month cycle. This will make loan giving and loan repayment time the same across India.

Proposal to Increase KCC Loan Time to 6 Years

One of the biggest proposed changes is to increase the KCC loan period up to 6 years. This will be very helpful for farmers who grow long-duration crops, as their crops take more time to grow and give income. With more time to repay, farmers can return the loan comfortably without money pressure. This move is expected to give relief to farmers growing crops that take longer to mature.

Loan Limit Based on Real Farming Cost

According to the draft rules, the KCC loan limit (drawing limit) will now be decided based on the real cost of farming. The loan amount will match the official cost fixed by the government for each crop.

This change aims to reduce the problem of farmers getting less loan money than needed. By linking the loan limit directly to actual farming expenses, the system will better support farmers’ financial needs.

KCC Money Can Be Used for Modern Farming Needs

Under the new system, KCC money can also be used for modern farming needs. These include:

• Soil testing
• Getting correct and timely weather information
• Organic farming certificate
• Good farming practice certificate

These activities will also be covered under the extra 20% fund given for farm equipment and maintenance.

A Step Towards Better Support for Farming

The changes proposed by the Reserve Bank of India are expected to make farm loans more practical and farmer-friendly. By making rules simple, increasing the loan period, and matching loan limits with real costs, the KCC scheme can become more useful and easier to access.

If these changes are implemented, they are likely to benefit crores of farmers in the country and strengthen the farm loan system.