The Reserve Bank of India has issued a new Kisan Credit Card framework for Small Finance Banks, to apply to loans sanctioned from January 1, 2027. The directions set out a six-year composite credit facility covering short-term working capital for crop cultivation and allied activities, along with long-term investment credit for agriculture and allied activities. Eligible borrowers include owner cultivators, tenant farmers, oral lessees, sharecroppers, eligible Self-Help Groups and Joint Liability Groups, as well as borrowers engaged in animal husbandry, fisheries, aquaculture and similar allied activities. For crop cultivation, drawing limits are to be based on the applicable Scale of Finance multiplied by cultivated area, plus 10 per cent for post-harvest expenses and household consumption, 20 per cent for maintenance and technology-related working capital needs, and any relevant insurance premium. Comparable principles apply to allied activities. The short-term component will operate as a revolving cash credit facility, while investment credit will be assessed on the proposed investment and repayment capacity, with repayment within six years unless the investment requires a longer tenor outside the KCC framework. The directions also introduce a Flexi KCC of INR 10,000 to INR 50,000 for marginal farmers based on bank assessment rather than land value, waive collateral and margin requirements for agricultural and allied loans up to INR 2 lakh per borrower, and allow collateral waiver up to INR 3 lakh for certain crop or stock hypothecation loans with tie-up recovery arrangements. Banks must enable KCC operations through permitted physical and digital channels, including Unified Payments Interface for working capital credit, debit cards, mobile and internet banking, National Electronic Funds Transfer, Real Time Gross Settlement and Central Bank Digital Currency, subject to the account holder's explicit consent where required. Loans sanctioned before January 1, 2027 will continue under the existing guidelines until maturity or next renewal, and banks must submit quarterly KCC loan data within 15 working days of each quarter-end. The new directions also repeal earlier KCC circulars applicable to Small Finance Banks.
Reserve Bank of India2026-06-19
Reserve Bank of India issues Kisan Credit Card directions for small finance banks from January 1 2027
The Reserve Bank of India has issued new Kisan Credit Card directions for Small Finance Banks, effective for loans sanctioned from January 1, 2027. The framework creates a six-year composite facility for crop, allied and investment credit, sets limit and repayment rules, and provides collateral-free lending up to INR 2 lakh. It also requires support for digital KCC operations and repeals earlier KCC circulars for these banks.