The Kisan Credit Card (KCC) scheme is a government-backed credit scheme, not an act or judgment, designed to provide timely and adequate institutional credit to farmers. It was introduced in August 1998 by Indian public sector banks. The model scheme was formulated by the National Bank for Agriculture and Rural Development (NABARD) following the recommendations of the R. V. Gupta Committee. The scheme’s primary objective was to meet the comprehensive credit requirements of the agriculture sector and reduce the farmers' dependence on informal moneylenders.
The KCC operates as a revolving cash credit facility, allowing farmers to withdraw funds as needed for cultivation and allied activities. The credit limit is determined based on the farmer's landholding and cropping pattern. The scheme provides both short-term credit for crops and term loans. A key provision is the waiver of collateral security for loans up to ₹2 lakh per borrower for agricultural and allied activities. The effective interest rate can be as low as 4% per annum, achieved through a 2% interest subvention and a 3% prompt repayment incentive for timely repayment. The repayment schedule is flexible, aligning with the crop harvest and marketing period.
The scheme connects to the Reserve Bank of India (RBI), which issues regulatory guidelines, and is implemented by commercial banks, Regional Rural Banks, and co-operative banks. Farmers are issued an ATM-enabled RuPay debit card, linking the scheme to the National Payments Corporation of India (NPCI).
The KCC has undergone significant changes, including an expansion in 2004 to cover investment credit for allied and non-farm activities, and a further extension in 2019 to include fisheries and animal husbandry. The RBI introduced a revised framework, the Reserve Bank of India (Commercial Banks: Kisan Credit Card Scheme) Directions, 2026, effective from January 1, 2027. This revision standardizes the crop season definition (12 months for short-duration crops) and extends the loan tenure to a composite facility of six years. The collateral-free limit of ₹2 lakh per borrower, which was revised in December 2024, remains unchanged in the new directions.