What changed
RBI consolidated and updated the KCC Scheme guidelines specifically for Regional Rural Banks, effective January 1, 2027. The Directions standardize crop seasons to 12 months for short-duration crops and 18 months for long-duration crops, and mandate a six-year composite credit tenure covering short-term needs for cultivation and allied activities like animal husbandry and fisheries.
What it means for you
RRBs must align their KCC lending processes with the new standardized crop seasons and six-year composite tenure by the effective date. This simplifies credit assessment and renewal cycles, but requires system updates to handle the defined durations and expanded allied activity purposes. Loans sanctioned before January 1, 2027, remain under old guidelines until maturity or renewal.
What you must do
- Update KCC loan origination and renewal systems to reflect standardized crop seasons (12 months short-duration, 18 months long-duration) and six-year composite tenure.
- Train credit staff on the expanded list of eligible allied activities under the KCC Scheme, including animal husbandry, fisheries, and aquaculture.
- Ensure all KCC sanctions from January 1, 2027, comply with the new Directions; existing loans continue under prior guidelines until maturity or renewal.
- Review internal policies to align with the definitions of marginal (≤1 hectare) and small farmers (1-2 hectares) for targeted credit support.
Who it affects
Regional Rural Banks (RRBs), KCC borrowers (farmers and allied activity participants), RRB credit and operations teams
When do the new KCC Directions take effect for RRBs?
The Directions apply to loans sanctioned under the KCC Scheme from January 1, 2027. Loans sanctioned before that date continue under existing guidelines until maturity or the next renewal.
What is the standard tenure for KCC loans under the new Directions?
The KCC Scheme now provides a composite credit facility with a tenure of six years, covering short-term credit for crop cultivation and allied activities.
How are crop seasons defined in the new Directions?
Short-duration crops have a standardized season of 12 months (sowing to marketing), while long-duration crops have a season of 18 months. Crops with duration up to 12 months are short-duration; those exceeding 12 months up to 18 months are long-duration.