**Executive Summary**
This report outlines government and RBI measures to strengthen the Kisan Credit Card (KCC) ecosystem, focusing on enhancing credit access and digital inclusion for small and marginal farmers. Key updates include raising the collateral-free loan limit to Rs. 2.00 lakh effective January 1, 2025, and the implementation of an updated Integrated Ombudsman Scheme starting July 1, 2026. The initiatives aim to streamline loan processing through digital platforms and ensure equitable credit distribution across districts.
**Key Points / Main Content**
**Lending Guidelines and Targets**
* **Priority Sector Lending (PSL):** Commercial, Regional Rural, and Small Finance Banks must allocate 18% of Adjusted Net Bank Credit to agriculture, with a 10% sub-target for Small and Marginal Farmers (SMFs).
* **Credit Distribution:** An incentive/dis-incentive framework is in place to ensure equitable credit flow to districts with historically lower credit access.
* **Expanded Scope:** Since 2019, the KCC scheme includes working capital for animal husbandry, dairying, and fisheries.
**Financial Incentives and Limits**
* **Interest Subvention:** Under the Modified Interest Subvention Scheme (MISS), farmers receive loans at a 7% interest rate, which drops to 4% for prompt repayment.
* **Collateral-Free Loans:** The limit for collateral-free short-term agricultural loans will be raised from Rs. 1.60 lakh to Rs. 2.00 lakh per borrower effective January 1, 2025.
* **KCC Features:** Benefits include ATM-enabled debit cards, one-time documentation, and built-in provisions for credit limit escalation.
**Digital Inclusion and Literacy**
* **Digital Portals:** The Jan Samarth portal and NABARD’s e-KCC portal allow for digital loan applications, evaluations, and approvals without physical bank visits.
* **Awareness Programs:** RBI, NABARD, and banks conduct Financial Literacy Camps (FLCs) and an annual Financial Literacy Week to educate the public.
**Grievance Redressal and Oversight**
* **Ombudsman Scheme:** Banks must adhere to the Reserve Bank – Integrated Ombudsman Scheme, with an updated version becoming effective on July 1, 2026.
* **Local Redressal:** Lead District Managers are required to hold quarterly public meetings to resolve grievances.
* **Monitoring Systems:** Citizens can use the Centralized Public Grievance Redressal and Monitoring System (CPGRAM) and individual bank whistle-blower mechanisms to report issues.
**Impact Analysis**
**Small and Marginal Farmers**
**Impact**
They gain easier access to credit through higher collateral-free limits and reduced interest rates (as low as 4%). Digital platforms reduce the need for physical paperwork and in-person bank visits.
**Action Required**
Farmers should utilize the Jan Samarth or e-KCC portals for applications and maintain prompt repayment schedules to qualify for interest incentives.
**Commercial and Regional Rural Banks**
**Impact**
Banks are mandated to meet specific PSL targets and transition to digital processing. They must also comply with stricter customer service and ombudsman guidelines.
**Action Required**
Banks must adjust lending systems to reflect the new Rs. 2.00 lakh collateral-free limit by January 2025 and onboard the Jan Samarth portal for loan processing.
**Lead District Managers (LDM)**
**Impact**
LDMs are positioned as the primary facilitators for grievance redressal at the district level.
**Action Required**
Must convene quarterly public meetings and ensure grievances are reviewed in Block Level Bankers’ Committee (BLBC) and District Consultative Committee (DCC) meetings.
Key Entities Referenced
Kisan Credit Card (KCC) Scheme: The central program aimed at enhancing credit access and digital inclusion for farmers, including those in animal husbandry, dairying, and fisheries.
Priority Sector Lending (PSL) Guidelines: RBI-issued regulations mandating banks to allocate specific percentages of credit to agriculture and small/marginal farmers.
Modified Interest Subvention Scheme (MISS): A government initiative providing short-term agricultural loans at concessional interest rates with incentives for prompt repayment.
Jan Samarth Portal: A single-window digital platform for linking government-sponsored schemes, used for the digital application and evaluation of KCC loans.
Reserve Bank of India (RBI): The primary regulatory body responsible for setting agricultural credit targets, collateral-free loan limits, and grievance redressal frameworks.
Ministry of Finance
Government Measures strengthen Kisan Credit
Card ecosystem to enhance credit access and
digital inclusion for farmers
Policy support, interest subvention, and digital platforms
drive expanded outreach, especially for small and marginal
farmers
Posted On: 30 MAR 2026 3:34PM by PIB Delhi
The Government has taken various steps to support farmers, including small and marginal, through
increasing access to Kisan Credit Cards (KCC), and promoting its digital issuance in all States/UT. These
measures inter-alia includes the following:
i. The Priority Sector Guidelines of Reserve Bank of India (RBI) issued to banks and Ground Level
Agriculture Credit (GLC) Target by the Government to banks act as key policy instruments in scaling up
KCC coverage and enhancing financial inclusion among farmers. In terms of extant guidelines on Priority
Sector Lending (PSL) issued by RBI, Commercial Banks including Regional Rural Banks, Small Finance
Banks, Local Area Banks and Primary (Urban) Co-operative Banks (UCBs) other than Salary Earners’
Banks are mandated to allocate at least 18% of their Adjusted Net Bank Credit (ANBC) or Credit
Equivalent of Off-Balance Sheet Exposures (CEOBSE), whichever is higher, to agriculture, out of which a
sub-target of 10 percent is prescribed for Small and Marginal Farmers (SMFs). Further, the PSL
Guidelines also prescribe an incentive framework for districts with comparatively lower flow of credit to
priority sector (which also include credit to agriculture and Small & Marginal farmers) and a dis-incentive
framework for districts with comparatively higher flow of priority sector credit for more equitable
distribution of the credit flow to agricultural sector.
ii. Since 2019, KCC scheme has been extended to cover working capital requirement of animal husbandry,
dairying and fisheries.
iii. The Government of India’s Modified Interest Subvention Scheme (MISS) offers short-term agricultural
loans to farmers at a concessional interest rate of 7% through Kisan Credit Cards (KCC). Farmers who
repay promptly receive an additional 3% incentive, effectively reducing their interest rate to just 4%.
iv. The limit for collateral free short-term agricultural loans, including loans for allied activities, has been
raised from Rs.1.60 lakh to Rs.2.00 lakh per borrower by RBI w.e.f.01 January 2025. This move enhances
credit accessibility, particularly for small and marginal farmers (over 86% of the sector), who benefit from
reduced borrowing costs and the removal of collateral requirements.
v. In order to bring awareness about the benefits of the KCC scheme among farmers, Union/State
Governments, RBI, NABARD and Banks conduct various financial Literacy and awareness programmes
through Centre for Financial Literacy (CFL), Financial Literacy Camps (FLCs) etc. Besides this, RBI alsoconducts Financial Literacy Week (FLW) every year to propagate the message of financial education on
various themes among members of the public across the country.
vi. Kisan Credit Card (KCC) scheme offers features such as an ATM-enabled debit card, one-time
documentation, in-built provision for cost escalation in the credit limit, and the flexibility to make multiple
withdrawals within the sanctioned limit, among others.
vii. The Jan Samarth portal has been started as a one-stop digital platform for linking Government-
sponsored loans and subsidies Schemes including Kisan Credit Card. It provides a quick and efficient way
to apply for loans and obtain approvals based on a digital evaluation of the applicant's data. State Level
Bankers’ Committee (SLBC), Madhya Pradesh and Maharashtra have informed that banks in both the
states have onboarded on the JanSamarth Portal through which farmers can apply for KCC. NABARD has
also introduced e-KCC portal for Regional Rural Banks (RRBs) and Rural Cooperative Banks (RCBs)
through which the process of loan application has been digitized, and farmers can submit their
applications to RRBs and RCBs without visiting their branches.
viii. Further, many banks and financial institutions have developed online platforms and mobile apps for
end to end digital processing of loan applications, reducing the need for physical paperwork and in-person
visits.
Government and RBI have undertaken various initiatives to improve customer service, strengthen
grievance redressal mechanisms in banks and protect whistle blowers, which inter-alia include the
following:
Banks are required to adhere to the customer service guidelines and the Reserve Bank – Integrated
Ombudsman Scheme, 2021 guidelines (updated as Reserve Bank –Integrated Ombudsman Scheme, 2026
to be effective from 01 July 2026) issued by RBI.
The Centralized Public Grievance Redressal and Monitoring System (CPGRAM) portal is available for
citizens, including bank customers, to lodge grievances with public authorities regarding service delivery.
In terms of Master Circular on Lead Bank Scheme dated 01 April 2025 issued by RBI, the Lead District
Manager (LDM) of the district is required to convene a quarterly public meeting at various locations to
provide grievance redressal to the extent possible or facilitate approaching the appropriate machinery for
such redressal. Further, grievances are reviewed regularly in Block Level Bankers’ Committee (BLBC)
and District Consultative Committee (DCC) meetings.
SLBC, Madhya Pradesh has informed that KCC borrowers/applicants can also lodge complaints through
the CM Helpline portal and “Jan Sunwai” mechanism of the District Collector.
Individual banks have also put in place their own whistle blower mechanism as per provisions of CVC
guidelines/Company Act/ RBI guidelines as applicable to them.
This information was given by the Minister of State in the Ministry of Finance Shri Pankaj Chaudhary in
Lok Sabha today.
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