Reserve Bank of India [Rural Co-operative Banks - Kisan Credit Card (KCC) Scheme] Directions, 2026
UR
- Applies toRural co-operative banks
- StatusIn force from 1 January 2027
- IssuedJun 19, 2026
- Amendmentsnone tracked
- Length55 points in 4 sections · 5 min read
The four dates on this rule
- PublishedJun 19, 2026The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyJanuary 01, 2027The day this rule starts to apply, as RBI's own text states it.
- Time to get ready196 daysThe room between the day it was published and the day it starts to apply.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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42 of the 55 points name no product and bind every product. All products.
Numbers to remember
| twelve months | A crop that takes up to twelve months from sowing to marketing is short duration. RBI Para 5(2) |
| six years | The composite facility is given for a term of six years. RBI Para 7 |
| Ten per cent | Ten per cent more is added for post harvest expenses and household consumption. RBI Para 12(1) |
| one thousand rupees | The card limit is rounded off to the nearest one thousand rupees. RBI Para 12(5) |
| ten thousand | A marginal farmer may be given a flexible limit of ten thousand to fifty thousand rupees. RBI Para 12(7) |
| three lakh rupees | Where recovery is tied up and crops are hypothecated, the waiver may go to three lakh rupees. RBI Para 23 |
| fifty thousand rupees | Where such a certificate is hard to get, an affidavit is accepted up to fifty thousand rupees. RBI Para 28 |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Can be read two ways
A point marked this way sits on an RBI paragraph that can honestly be read two ways. Our own sentence takes one of the two. BankPulse does not choose for you: read RBI’s own paragraph, at the number printed on the point, before you act on it.
Two ways — both, or either one. RBI’s paragraph joins two things in the and-or form. One reading: Both of them apply, together. The other: Either one of them, on its own, is enough.
Opening paragraphs
1. What this book does
This book sets out how a bank lends to a farmer under the Kisan Credit Card scheme.
Chapter I. Preliminary
Must know
1. Short duration crop
A crop that takes up to twelve months from sowing to marketing is short duration.
2. Long duration crop
A long duration crop takes more than twelve months and up to eighteen months.
3. Seasons are standardised
The crop season is fixed at twelve months for short crops and eighteen for long ones.
Do it
4. Procedure must stay simple
RBI requires the process to be simple and standard for the borrower.
Background
5. Start date
These rules apply to loans sanctioned on or after 1 January 2027.
6. Older loans continue
A loan sanctioned before that date follows the earlier rules until it matures or is renewed.
7. One facility, two parts
The card carries a working capital part and an investment credit part together.
8. Who is covered
These rules bind every rural co-operative bank in India.
9. Which banks are rural co-operatives
A rural co-operative bank means a state co-operative bank or a central co-operative bank.
10. Marginal farmer defined
A marginal farmer holds land of up to one hectare.
11. Small farmer defined
A small farmer holds more than one hectare and up to two hectares.
Chapter II. Credit - Purpose, Tenure and Limit
Must know
1. Facility runs six years
The composite facility is given for a term of six years.
2. Ten per cent added
Ten per cent more is added for post harvest expenses and household consumption.
3. Scale not notified
Where the scale of finance is not notified, the bank adds ten per cent to last season.
BankPulse example. Suppose last season's scale of finance was ₹40,000 an acre, and this season's is not notified. The bank adds 10 per cent, giving ₹44,000 an acre.
4. Rounding rule
The card limit is rounded off to the nearest one thousand rupees.
BankPulse example. The card limit is rounded to the nearest ₹1,000. Suppose the working comes to ₹1,43,600. It is rounded to ₹1,44,000. A working of ₹1,43,400 is rounded to ₹1,43,000.
5. Ten per cent each year
From the second season, ten per cent is added to the previous season's limit.
BankPulse example. Suppose the first season's limit is ₹1,00,000. The second season's limit is 10 per cent more, which is ₹1,10,000. The third season's is ₹1,21,000.
6. Flexi card for marginal farmers
A marginal farmer may be given a flexible limit of ten thousand to fifty thousand rupees.
BankPulse example. A marginal farmer may be given a flexible limit between ₹10,000 and ₹50,000. A card set at ₹30,000 sits inside that band. The bank sets it on its own assessment, not on the value of the land.
7. Investment loan term
The investment part is repayable within six years, by the kind of asset financed.
Background
8. What the limit means
The sixth year short term limit plus the estimated long term limit is the card limit.
9. Short part revolves
The short term part works as a revolving cash credit account.
10. No cap on operations
There is no limit on how many times the account may be debited or credited.
11. Who may borrow
An owner cultivator, a tenant farmer, an oral lessee and a sharecropper may all borrow.
12. Groups may borrow
A self help group and a joint liability group of cultivators are also eligible.
13. How the limit is built
The scale of finance for the crop is multiplied by the area under cultivation.
14. Insurance premium added
The premium for crop, accident, health and asset insurance is added where taken.
15. Change of crop, new limit
If the farmer changes his cropping pattern, the drawing limit is worked out afresh.
16. Notified but not revised
Where the scale is notified but not revised, the existing scale is used.
17. Crops outside the scale
A crop with no notified scale of finance is lent outside the card framework.
18. Land value not the test
That flexible limit is set by the bank without tying it to the value of the land.
19. Allied activity borrowers
An animal husbandry farmer, a fisher and a fish farmer may borrow for allied work.
20. Consumption counted once
Where a farmer borrows for crops and allied work, the consumption component is counted once.
Chapter III. General Instructions
Must know
1. Three lakh with tie-up
Where recovery is tied up and crops are hypothecated, the waiver may go to three lakh rupees.
BankPulse example. Collateral security may be waived for a loan up to ₹3 lakh. So a loan of ₹2.5 lakh is covered. A loan of ₹4 lakh is not.
2. Affidavit up to fifty thousand
Where such a certificate is hard to get, an affidavit is accepted up to fifty thousand rupees.
BankPulse example. A borrower who cannot get the certificate may give an affidavit instead. That works for a loan up to ₹50,000. A loan of ₹75,000 needs the certificate.
Do it
3. Declaration must be kept
The bank must take a clear written declaration from the borrower and keep it on record.
4. Watch the end use
The bank must keep checking that the money is used for the purpose sanctioned.
5. Declaration at each review
At every review the bank must take a fresh declaration of the work proposed.
6. Local certificates accepted
For a sharecropper or oral lessee, a certificate from the local body must be accepted.
7. Consent before premium
Consent must be taken at the application stage if premium is to come from the account.
8. Cover assigned to the bank
Insurance paid for out of the card facility must be assigned to the lending bank.
9. Digital channels opened
The bank must enable the card on unified payments interface, debit cards and net banking.
Background
10. Interest on advances
The interest charged follows RBI's own Directions on interest rates on advances.
11. Gold pledge allowed
A voluntary pledge of gold or silver within that free limit is not a breach of the rule.
12. Free limit means secondary
The collateral free limit covers secondary security only, not the asset the loan buys.
13. Sub-limits kept apart
Short term and long term parts are kept as separate accounts under one facility.
14. Review and renew
Short term limits for crops and allied work are reviewed and renewed by credit policy.
15. Papers taken once
Land record or tenancy papers are taken once, at the time of the fresh application.
16. Insurance is the farmer's choice
The card holder chooses whether to take crop, asset, accident or health cover.
17. Many ways to draw
The farmer may draw through a banking outlet, a business correspondent or an ATM.
18. Drawing at the mandi
Mobile based drawing is allowed at agricultural input dealers and at mandis.
19. Consent before digital access
Those digital channels are opened only after the account holder gives clear consent.
20. Warehouse receipt linked
A loan against a warehouse receipt is linked to the short term card loan.
21. Subvention rules apply
Instructions on interest subvention and prompt repayment incentive continue to apply.
22. Bad loan rules apply
The usual rules on income recognition, asset classification and provisioning apply here.
Chapter IV. Disclosure, Exemptions and other Provisions
1. RBI may exempt
RBI may extend time or exempt a lender from any part of these rules.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for rural co-operative banks
RBI capital adequacy rules for rural co-operative banks 2025
RBI credit bureau reporting rules for rural co-operative banks 2025
RBI customer service and fair conduct rules for rural co-operative banks 2025
RBI deposit interest rate rules for rural co-operative banks 2025
RBI digital banking channel rules for rural co-operative banks 2025
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