The Reserve Bank of India (RBI) on Friday released the final guidelines on the Kisan Credit Card (KCC) scheme. The central bank accepted several stakeholder suggestions on its proposed guidelines, including deferring the implementation of the revised framework to January 1, 2027.

“Considering operational and implementation challenges at the field level, KCC loans sanctioned prior to January 01, 2027 shall continue to be governed by the existing KCC guidelines till maturity / next renewal,” RBI said. The central bank had released the draft norms in February. RBI said that the final guidelines will not be applicable to operations of overseas branches of Indian banks.

Among the major changes accepted by the central bank are the incorporation of district level technical committee (DLTC) scale of finance references, an indicative list of technology interventions eligible under KCC, applicability of Flexi KCC to allied activities, and rounding off of KCC credit limits to the nearest Rs 1,000.

The regulator has also clarified that where the notified Scale of Finance is not revised in a subsequent year, banks should continue using the existing scale without automatically increasing the drawing limit by 10%. Scale of Finance is the pre-determined financial cost required to cultivate a specific crop per unit area for a single season.

On Flexi KCC, the final guidelines said that marginal farmers would be eligible for a flexible credit limit of Rs 10,000 to Rs 50,000 as per assessment of the bank without relating it to the value of the land. “The credit limit shall be based on crops grown, post-harvest warehouse 6 storage related credit needs, other farm expenses, consumption needs and investment requirements for agriculture and allied activities,” the final guidelines said.

RBI also accepted suggestions to treat investment loans with a tenure exceeding six years as separate credit facilities outside the KCC framework. It further clarified that banks may maintain separate loan accounts for working capital and long-term investment components.

However, the regulator rejected demands to raise the collateral-free lending limit, increase the Flexi KCC limit, permit lending beyond the prescribed Scale of Finance, simplify the drawing limit methodology, and allow KCC renewals based only on interest servicing.

It said such changes could weaken credit discipline, increase credit risk or lead to over-financing. The RBI also declined suggestions to standardise documentation across banks, waive additional charges beyond existing priority sector lending norms, provide free life and health insurance to KCC holders, or enhance benefits under the Modified Interest Subvention Scheme.

“The provision of free life or health insurance for KCC holders falls under the policy domain of the Government of India, and the draft Directions only enable farmers to opt for insurance with explicit consent. Issues relating to cross-selling of insurance are outside the scope of the MD and are being addressed under separate guidelines,” RBI said.

The revised guidelines also clarify that explicit borrower consent must be obtained if insurance premiums are to be debited from the KCC account and reaffirm that KCC operations may continue through multiple channels, including cash withdrawals.