RBI/FIDD/2025-26/xx

_________2026

Draft- Reserve Bank of India [Rural Co-operative Banks - Kisan Credit Card (KCC) Scheme] Directions, 2026

In exercise of the powers conferred under Section 21 and Section 35A read with section 56 of the Banking Regulation Act, 1949 and of all the powers enabling it in this behalf, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest and in the interest of banking policy to do so, hereby, issues the Directions hereinafter specified.

Chapter I: Preliminary

A. Short Title and Commencement

1. These Directions shall be called the Reserve Bank of India [Rural Co-operative Banks -Kisan Credit Card (KCC) Scheme] Directions, 2026.

2. The Directions shall be applicable to all loans granted under the KCC Scheme from the date of issuance of this Master Direction. Existing loans sanctioned prior to the date of issuance of the Directions shall continue to be governed by the extant guidelines applicable before the issuance of these Directions. However, the Directions shall be applicable to such loans from the date of next review / renewal of the facility.

B. Objective

3. These Directions are issued with a view to laying down the framework for adequate and timely credit support from the banking system to be provided under the Kisan Credit Card (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 procedure.

C. Applicability

4. These Directions shall be applicable to Rural Co-operative Banks (RCBs), (hereinafter collectively referred to as ‘banks’ and individually as a ‘bank’)

In this context, ‘Rural Co-operative Banks’ shall mean State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs), as defined in the National Bank for Agriculture and Rural Development Act, 1981.  

D. Definitions/Clarifications 

5. For the purpose of these Directions, unless the context or subject otherwise requires, the terms herein shall bear the meanings assigned to them as given below:

(1) “Crop season” means the period up to harvesting and marketing of the crops raised. Crop season for ‘short duration crops’ shall be considered as 12 months and for ‘long duration crops’ as 18 months. 

(2) “Marginal farmer” means a farmer with landholding of upto one hectare.

(3) “Small farmer” means a farmer with landholding of more than one hectare and upto two hectares.

6. Words and expressions used herein and not defined in these Directions, but defined in the Reserve Bank of India Act, 1934 or the Banking Regulation Act, 1949, shall have the meanings assigned to them in those Acts.

Chapter II: Credit - Purpose, Tenure and Limit

E. Purpose and Tenure

7. Under the KCC Scheme, banks shall extend credit to the eligible borrowers for their farming and other needs as indicated below in the form of a composite facility with a tenure of six years:

(1) Short term credit requirements for cultivation of crops

(2) Short term credit requirements for allied activities, an indicative list of which is provided in the table below:

(3) Post-harvest / post- production expenses

(4) Consumption requirements of farmer household

(5) Expenses for maintenance of assets related to agriculture and allied activities, soil testing, real time weather forecasts / other technological support services and organic / good agricultural practices or similar relevant certification

(6) Crop insurance, accident insurance, health insurance and asset insurance

(7) Produce marketing loans

(8) Investment credit requirements for agriculture and allied activities

8. The aggregate of components at (1) to (7) above shall form the short-term credit limit portion of the composite facility and the component at (8) shall constitute the long-term credit limit portion of the facility.

9. The short-term credit limit fixed for the sixth yeartogether with the estimated long-term credit limit shall be the Composite Maximum Permissible Limit (CMPL) and is to be treated as the Kisan Credit Card limit.

Note: Refer D of illustrations 1 and 2 given in the Annex I.

10. The short-term component of the KCC limit for the purposes of crop cultivation and allied activities shall be in the nature of revolving cash credit facility. There shall be no restriction on the number of debits and credits.

F. Working capital for cultivation of crops

11. Eligibility

The following shall be eligible to avail credit for working capital requirements for cultivation of crops:

(1) Farmers (individual / joint borrowers), who are owner cultivators

(2) Tenant farmers, oral lessees and sharecroppers

(3) Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) of farmers / cultivators including tenant farmers, oral lessees and sharecroppers.

12. Fixation of Drawing Limit

(1) The drawing limit for each crop season shall be the sum total of the following:

1. Scale of Finance (SoF) [as notified by State Level Technical Committee (SLTC)] for the respective crop/s for the current crop season multiplied by extent of area of cultivation

2. 10 per cent of (i) above towards post-harvest expenses and consumption requirements of household

3. 20 per cent of (i) above towards repairs and maintenance of farm assets, soil testing, real time weather forecasts and other technological support services and organic / good agricultural practices certification

4. Crop insurance, accident insurance, health insurance and asset insurance, if any.

(2) In case the cropping pattern adopted by the farmer changes for any subsequent season, the drawing limit shall be reworked by taking into consideration the crops proposed to be grown.

(3) In situations where the SoF has not been notified by SLTC for a particular crop season, at the time of the farmer availing the loan, the bank shall consider applying a 10 per cent notional hike over the SoF applicable for the previous season and determine the drawable limit for the ensuing season.

(4) At the time of sanction, the maximum permissible credit limit for the short-term crop loan shall be arrived at on a notional basis by adding 10 per cent to the limit of the previous crop season, from the second crop season onwards.

Note: Refer A (I), (II), (III) and (IV) of Illustrations 1 and 2 given in the Annex I.

(5) In case of marginal farmers, a flexible limit of ₹10,000 to ₹50,000 shall be provided (as Flexi KCC) based on the land holding and crops grown / being grown for their working capital and investment related credit needs as per the assessment of the bank. The composite KCC limit shall be fixed for a period of six years on this basis. Wherever higher limit is required due to change in cropping pattern and / or scale of finance, the limit shall be fixed as provided in paragraphs from 12(1) to 12(4) above.

13. Repayment Period

Banks shall fix the repayment period as per the crop season applicable.

G. Working Capital for Allied Activities

14. Eligibility

The following borrowers shall be eligible to avail credit for working capital requirements for allied activities:

(1) Animal husbandry farmers, fishers, fish farmers and farmers (including tenant farmers and sharecroppers), undertaking allied activities as per para 7(2) as individual / joint borrowers; and

(2) SHGs / JLGs of individuals as above.

15. Fixation of Drawing Limit

(1) Banks shall fix the drawing limits for allied activities based on the SoF [as notified by SLTC] for the respective activities and number of units (acre / unit / animal / bird etc.) by adopting the method analogous to that of working capital loans for cultivation of crops as indicated at paragraph 12 above.

Note: Refer B (I), (II), (III) and (IV) of Illustrations 1 and 2 given in the Annex I.

(2) The drawing power for the working capital limit for allied activities shall be determined based on the latest valuation of stocks, receivables and / or cash flows as per terms of sanction.

16. Repayment Period

Banks shall fix the repayment period as per the cash flow/income generation pattern of the activity undertaken by the borrower.

H. Investment Credit for Agriculture and Allied Activities

17. Eligibility

Beneficiaries specified in paragraph 11 and 14 above shall be eligible to avail investment credit for purposes related to agriculture and allied activities, illustratively:

1. land development,
2.   minor irrigation,
3.   purchase of farm / fishing etc. equipment,
4. construction of animal / bird shed,
5.   purchase of livestock,
6.   purchase of equipment related to allied activities, and
7. similar other purposes

18. Fixation of Limit

 (1) The term loan limit shall be based on the proposed investment(s) during the tenure of the KCC facility and the bank's assessment of the repaying capacity of the borrower.

Note: Refer C (I), (II) and (III) of Illustrations 1 and 2 given in the Annex I.

(2) The draw down of instalments shall be allowed based on the nature of investment.

19. Repayment Period

 The term-loan component shall be repayable within a period of six years depending on the type of activity / investment, as per the bank’s credit policy applicable for investment credit.

Chapter III: General Instructions

I. Rate of Interest

20. The bank shall follow the existing practice of charging / compounding of interest on agricultural advances linked to crop seasons as stipulated in Reserve Bank of India (Rural Co-operative Banks - Interest Rates on Advances) Directions, 2025 dated November 28, 2025, as updated from time to time.

J. Collateral Security and Margin

21. Banks shall waive collateral security and margin requirements for agricultural loans including loans for allied activities upto ₹2 lakh per borrower. However, the voluntary pledge of gold and silver as collateral for agriculture loans up to the collateral-free limit will not be considered as a violation of the guidelines on collateral-free lending to the agriculture sector. Banks shall obtain and retain explicit declaration from the borrower in such cases.

22. Banks shall decide the collateral security and margin requirements for loans above ₹2 lakh as per their credit policy and in adherence with RBI guidelines issued from time to time.

23. In case of KCC loans against hypothecation of crops / stock and involving tie-up arrangements for recovery, banks may waive collateral security for loans up to a limit of ₹3 lakh.

K. Segregation of Limits

24. Considering the different interest rates and repayment schedules applicable to various types of credit provided under KCC, the facility may be divided into sub-limits for short-term cash credit limit-cum-savings accounts for crop cultivation and allied activities separately, and long term loan for agriculture and allied activities.  

L. Monitoring of End Utilization

25. Banks shall ensure ongoing monitoring of the end use of the credit facility by the borrower as per the terms of sanction through field inspections and other means, as per their credit policy.

M. Review and Renewal

26. Banks shall undertake review and renewal of the short-term limits for crop cultivation and allied activities as per their credit policy.

N. Other instructions

27. Banks shall obtain a one-time documentation including land record / tenancy certificate / equivalent certificate as per their credit policy at the time of application for fresh loan. During the tenure of the facility, at the time of each review, the bank shall obtain declaration from the borrower(s) regarding proposed activity / activities.  

28. In case of loans to sharecroppers and oral lessees, banks shall accept certificates provided by local administration / panchayati raj institutions regarding the cultivation of crops by such borrowers. Where there are difficulties in getting certification regarding identity and occupational status of sharecroppers and oral lessees, banks shall accept an affidavit submitted by such borrowers giving their occupational status (i.e. details of land tilled / crops grown), for loans upto ₹50,000.

29. Processing fees, inspection charges and other charges shall be as per the bank’s policy on applicable charges and applicable regulatory guidelines, if any.

30. The KCC holder will have the option to avail any type of crop insurance, asset insurance, accident insurance (including Personal Accident Insurance Scheme) or health insurance and may pay the premium through the KCC account. Premium shall be borne by the farmer / bank according to the terms of the scheme. Beneficiaries shall be made aware of the insurance covers available, and their explicit consent shall be obtained, at the application stage itself.

31. In case insurance (crop insurance, asset insurance and personal accident insurance) is funded under the KCC facility, the same shall be assigned in favour of the lending bank.

32. Draw down of the limit shall be allowed as per the convenience of the farmer using any of the following delivery channels:

(1) operation through banking outlet/part-time banking outlet (as defined in the (Rural Co-operative Banks - Branch Authorisation Directions, 2025 dated November 28, 2025)) and business correspondents

(2) operation through ATMs / micro-ATMs / PoS terminals, etc. in an interoperable manner

(3) mobile based transactions at agricultural input dealers and mandis

(4) operation through any other permitted digital delivery channel

33. Banks shall enable operations in KCC accounts through Unified Payments Interface (for working capital credit), debit cards (as stipulated in Reserve Bank of India (Rural Co-operative Banks – Debit Cards: Issuance and Conduct) Directions, 2025 dated November 28,2025), mobile banking, internet banking, National Electronic Funds Transfer (NEFT), Real Time Gross Settlement (RTGS), Central Bank Digital Currency (CBDC) or any other regulated digital delivery channel, after obtaining explicit consent of the account holder.

34. In case the farmer applies for loan against the warehouse receipt of his produce, the bank shall consider such request as per the established procedure and guidelines. The loan extended to the farmer against warehouse receipts of produce shall be linked with the related short-term KCC loan, if any, and the outstanding amount in such loan shall be adjusted at the time of disbursal of the loan secured by warehouse receipt.

35. Banks shall adhere to the instructions regarding interest subvention and prompt repayment incentive on KCC loans, as applicable from time to time.

36. The extant prudential norms on income recognition, asset-classification and provisioning as stipulated in Reserve Bank of India (Rural Co-operative Banks – Income Recognition, Asset Classification and Provisioning) Directions, 2025 dated November 28, 2025, as updated from time to time shall apply for loans granted under the KCC Scheme.

Chapter IV: Reporting Requirements

O. Data Reporting

37. Banks shall submit data on KCC loans to NABARD as per the prescribed reporting format.