Top News

Kisan Credit Card Scheme: The Reserve Bank of India (RBI) has issued new and revised guidelines for the Kisan Credit Card (KCC) scheme. These guidelines aim to create a single, simple, and clear framework for farming and related activities. These changes aim to provide farmers with easier and more flexible access to loans, improve KCC loans to suit their new needs, and simplify access to loans for all farming and related activities.

Which banks will be subject to these regulations?

Commercial banks

Small finance banks

Regional rural banks (RRBs)

Rural cooperative banks

A simple and uniform framework for KCC loans
The RBI has proposed a single, simple, and clear framework for KCC loans. The aim is to ensure uniform rules apply to all farming and related activities, enabling banks to administer the KCC scheme more easily and reach more farmers. Furthermore, to reduce confusion among farmers, the RBI has suggested a uniform crop season across the country. Short-term crops, i.e., a 12-month cycle, and long-term crops, i.e., an 18-month cycle, have been included. This will ensure consistent loan disbursement and repayment periods across the country.

Proposal to Extend KCC Loan Tenure to 6 Years
The most significant change is that KCC loans can now be extended to six years. This is particularly beneficial for farmers who grow long-term crops, as their crop cycles are longer and income takes longer to arrive. The new rules will make it easier for them to repay the loan.

What the New Rules Say
According to the new draft rules, the KCC loan limit, i.e., the drawing limit, will now be determined based on actual cultivation costs. Farmers will receive loans based on the official government-determined cost for each crop. This will reduce the problem of farmers receiving insufficient funds.

Under the new framework, KCC funds can now be used for modern farming needs. This includes soil testing, accurate and timely weather information, certifications required for organic farming or good agricultural practices, and all of these are included in the additional 20% funds given for farm equipment and maintenance.

Disclaimer: This content has been sourced and edited from NDTV India. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.