KCC credit classified as direct agriculture finance
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2011-12/224 · issued 18 Oct 2011 · ~1 min read
Quick answerRBI clarifies that credit extended under Kisan Credit Cards (KCC) qualifies as direct finance to agriculture under priority sector lending for RRBs, as per circular dated October 18, 2011.
What changed
RBI issued a clarification that KCC credit, being primarily for agricultural purposes, will be treated as direct finance to agriculture under priority sector lending, referencing earlier guidelines from August 22, 2007 that defined working capital and term loans for agriculture as direct finance.
What it means for you
For RRBs, this means KCC loans now count toward priority sector targets as direct agriculture finance, simplifying compliance. It encourages more KCC lending by ensuring these loans get the same treatment as other agricultural direct finance.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Classify all KCC loans as direct finance to agriculture under priority sector lending.
Acknowledge receipt of this circular to the respective RBI Regional Office.
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this circular apply to all KCC loans issued by RRBs?
Yes, the circular clarifies that credit under KCC, being primarily for agricultural purposes, is treated as direct finance for agriculture under priority sector lending for all RRBs.
What was the previous treatment of KCC loans before this circular?
Previously, only working capital and term loans for agriculture were explicitly treated as direct finance. This circular extends that treatment to KCC credit.
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/224
RPCD.CO RRB. BC.NO.24 /03.05.33/2011-12
October 18, 2011
The Chairmen
All Regional Rural Banks (RRBs)
Dear Sir,
Inclusion of Credit under KCC under direct financing for Agriculture
Please refer to Para 1.1.3 of our circular RPCD.No.RRB.BC.20/03.05.33/2007-08 dated August 22, 2007 on lending to priority sector in terms of which working capital and term loans for financing production and investment requirements for agriculture and allied activities are treated as direct finance to agriculture under priority sector.
2. As credit under the Kisan Credit Card is primarily for agricultural purposes, it is clarified that such credit would be treated as direct finance for agriculture under priority sector lending.
3. Kindly acknowledge receipt of the circular to our Regional Office concerned.
Yours faithfully
(C. D. Srinivasan)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/224 · issued 18 Oct 2011. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6765&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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