**Summary:**
This document summarizes the Indian government's response to Lok Sabha Unstarred Question No. 3990, addressed on August 18, 2025, regarding the waiver of various charges for small farmers availing Kisan Credit Card (KCC) loans. The question inquired whether the Indian Banks Association (IBA) had advised banks to waive processing, documentation, inspection, ledger folio, and other service charges for KCC loans up to Rs. 3 Lakhs, given the financial difficulties faced by small and marginal farmers.
The Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, responded that in a deregulated credit environment, banks have the discretion to make credit-related decisions, including levying charges and fees, based on their Board-approved policies and subject to Reserve Bank of India (RBI) prudential norms. Banks' decisions regarding processing fees, inspection charges, and other charges for KCC loans are governed by their respective Board-approved policies and the RBI's Master Circular on the KCC scheme dated July 4, 2018.
The response further clarifies that the IBA issued an advisory on February 4, 2019, requesting all member banks to waive processing, documentation, inspection, and all other service charges for KCC crop loans up to Rs. 3 Lakhs, considering the hardship and financial distress of small and marginal farmers. The document does not indicate whether this advisory has been universally adopted by all banks, nor does it outline any mandatory government action to enforce compliance.
Key Entities Referenced
Ministry of Finance: A department of the Government of India responsible for financial matters.
Lok Sabha: The lower house of the Parliament of India.
SHRI HANUMAN BENIWAL: A member of parliament who asked the question related to waiving off charges for small farmers.
Indian Banks Association: An association of banks in India that provides a platform for discussion and advocacy on banking-related issues.
KCC loans: Kisan Credit Card loans, a credit scheme to provide farmers with access to credit for agricultural needs.
RBI: Reserve Bank of India, the central bank of India.
SHRI PANKAJ CHAUDHARY: Minister of State in the Ministry of Finance who provided the answer.
Kisan Credit Card scheme: A credit scheme to provide farmers with access to credit for agricultural needs.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 3990
ANSWERED ON MONDAY, AUGUST 18, 2025/ SRAVANA 27, 1947 (SAKA)
WAIVE OFF VARIOUS CHARGES FOR SMALL FARMERS
†3990. SHRI HANUMAN BENIWAL:
Will the Minister of FINANCE be pleased to state:
(a) whether the Indian Banks Association has advised to waive off processing,
documentation, inspection, ledger folio fee and other service charges for KCC loans upto
Rs. 3 Lakhs in view of the financial hardships of small and marginal farmers;
(b) whether the said advice is being followed by the banks and if so, the details thereof;
(c) if not, the reasons therefor; and
(d) whether the Government proposes to make it mandatory so that it is strictly complied
with by all the banks?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (d) In a deregulated credit environment, banks have been accorded the discretion to take
credit related decisions, including levy of charges and fees, in terms of their Board approved
policy subject to prudential norms of RBI. Accordingly, banks take decision on processing
fee, inspection charges and other charges for Kisan Credit Card scheme (KCC) loans as per
their respective Board approved policies and in accordance with the provisions of Master
Circular on Kisan Credit Card scheme (KCC) dated 04.07.2018 issued by RBI.
Indian Bank Association issued an advisory on 04 February 2019 and requested all the member
banks to waive the processing, documentation, inspection and all other service charges for
KCC/crop loans upto ₹ 3 lakhs, keeping in view of the hardship and financial distress of small
and marginal farmers.
***