RBI's New ₹50,000 Flexi Kisan Credit Card: How marginal farmers can unlock credit amid revised norms

The Reserve Bank of India (RBI) has introduced revised guidelines for the Kisan Credit Card (KCC) Scheme, bringing greater uniformity to agricultural lending by standardising the definition of crop seasons. The move is aimed at ensuring consistency in the sanctioning of loans and determining repayment schedules across the banking system.

The new framework, titled the RBI Commercial Banks – Kisan Credit Card (KCC) Scheme Directions, 2026, will come into effect from January 1, 2027.

According to the central bank, the revised directions seek to establish a comprehensive framework for providing adequate and timely credit support to farmers and borrowers engaged in agriculture and allied activities. The KCC facility is designed to meet both working capital and investment credit requirements through a simplified and standardised lending process.

A key change under the revised guidelines is the modification of the definition of "crop season" to align it with the Income Recognition and Asset Classification (IRAC) norms applicable to banks. Under the new definition, a crop season will refer to the period beginning with the cultivation of a crop and ending with its harvesting and marketing.

The revised norms follow the RBI's draft guidelines on the KCC Scheme issued in February this year for public consultation and stakeholder feedback. After reviewing the suggestions received, the central bank has finalised the framework while retaining several existing provisions.

Among the recommendations considered was a proposal to increase the collateral-free loan limit under the scheme. However, the RBI declined the suggestion, pointing out that the limit had already been enhanced in December 2024 and that no further increase is being contemplated at present.

On collateral and margin requirements, the RBI has directed banks to waive both collateral security and margin requirements for agricultural loans, including those extended for allied activities, up to Rs. 2 lakh per borrower.

For loan amounts exceeding Rs. 2 lakh, banks will have the flexibility to determine collateral and margin requirements in accordance with their internal credit policies, while remaining compliant with RBI regulations and prudential norms.

The central bank has also provided additional relief for KCC loans secured through hypothecation of crops or stock and supported by recovery tie-up arrangements. In such cases, banks may waive collateral security requirements for loans up to Rs. 3 lakh.

The revised directions further require banks to periodically review and renew short-term credit limits sanctioned for crop cultivation and allied agricultural activities. Such reviews are to be carried out in line with each bank's credit policy to ensure that credit limits remain aligned with borrowers' requirements and changing agricultural conditions.

The latest guidelines are expected to streamline agricultural lending practices, improve access to institutional credit for farmers, and ensure greater consistency in loan assessment and repayment structures under the Kisan Credit Card Scheme.