The Reserve Bank of India has made major preparations to make farming in the country modern and to make the loan limit of farmers realistic. The central bank on Thursday released a new draft for changes in the Kisan Credit Card (KCC) scheme. According to the new draft rules of RBI, Kisan Credit Card will not be limited to purchasing fertilizers and seeds only, but it will also include the cost of soil testing and reports related to weather forecasts. Following the recent announcement by Reserve Bank of India Governor Sanjay Malhotra, the central bank has issued new draft rules.
Proposal to extend loan tenure to six years
The Reserve Bank of India has proposed to bring nationwide uniformity in the rules of loan repayment and crop rotation. Giving great relief to the farmers, it has been proposed to increase the period of KCC to six years. This will help in improving coordination of loans for long duration crops. The validity period of KCC is currently five years. Changes have also been made in the RBI draft rules regarding crop rotation. The standard cycle has been fixed at 12 months for short duration crops and 18 months for long duration crops.
Money will be given on the actual cost of farming
Farmers used to complain that the loan amount received from the bank under KCC is less than the cost of farming. The Reserve Bank has also tried to remove this problem in the proposed draft rules. To remove this discrepancy, the Reserve Bank has proposed that under this the withdrawal limit will be directly linked to the ‘scale of finance’ of the crop. This means that now the loan amount will be decided according to the actual cost of farming. So that farmers can get adequate loans.
Now the bank will also bear the expenses of smart farming
In the era of AI, farming methods are also changing. In view of this, RBI has also proposed related changes in KCC. For the first time in the draft, expenditure related to technical aspects has been brought under the ambit of loan. Now the expenditure on soil testing, real-time weather information and certification of organic farming will also be considered as ‘eligible expenditure’. These expenses will be covered within the additional 20% component for repair and maintenance of agricultural properties.
Opinion sought on KCC from common people till March 6
The Reserve Bank of India has said that the purpose of the changes is to meet the emerging needs of the agriculture sector and expand credit coverage. The central bank has sought suggestions and comments on these proposals from banks, experts and the general public by March 6, 2026.
