Central Government Kisan Credit Card: 4% Effective Interest on Timely Repayment

Central Government Kisan Credit Card: 4% Effective Interest on Timely Repayment — Benefit up to Rs 3 Lakh

8 November 2026, 5:57 PM • Harish Sharma • Category: All India Schemes

📌 Key information

News: Central Government Kisan Credit Card: 4% Effective Interest on Timely Repayment — Benefit up to Rs 3 Lakh
Date: 8 November 2026, 5:57 PM
Author: Harish Sharma
Category: All India Schemes
Source: See the official portal for details — the link is inside the story.

The Kisan Credit Card (KCC) is the oldest government route to cheap and easy farm credit. The scheme began in 1998 and is run by banks under the framework of the Reserve Bank of India (RBI) and NABARD, with the Ministry of Agriculture and Farmers Welfare as the nodal ministry. KCC is a revolving credit facility — the farmer draws money as needed and repays it after the harvest.

How much interest is charged

Under the Modified Interest Subvention Scheme (MISS), banks charge 7% interest a year on short-term crop loans up to Rs 3 lakh. If the farmer repays on time, an additional 3% prompt repayment incentive applies, bringing the effective interest down to just 4% a year. This benefit applies only to the portion up to Rs 3 lakh — amounts above that carry the bank’s normal rate. The Union Budget 2025-26 announced raising this limit from Rs 3 lakh to Rs 5 lakh, but the RBI circular of 13 January 2026 still applies the 7% and 4% rates only up to Rs 3 lakh — ask your branch which limit currently applies.

How much credit without collateral

Under RBI rules, agricultural loans of up to Rs 2 lakh are collateral-free — this limit was raised from Rs 1.6 lakh to Rs 2 lakh with effect from 1 January 2025. Where there is a tie-up arrangement for recovery against hypothecation of crops, banks may waive collateral for loans up to Rs 3 lakh.

Who can apply

KCC is not only for farmers who own land. Owner cultivators, tenant farmers, oral lessees and sharecroppers are all eligible. Self Help Groups (SHGs) and Joint Liability Groups (JLGs) of farmers can also apply. Since 2019, the facility has also covered farmers engaged in animal husbandry, dairy and fisheries. The credit can be used for crop cultivation, post-harvest expenses, marketing of produce, household needs and maintenance of farm assets.

How to apply

Apply for a KCC at any bank branch — a commercial bank, regional rural bank, cooperative bank or small finance bank. The application can also be started online through the JanSamarth portal (jansamarth.in). You will need land documents or proof of cultivation, an identity proof and bank account details. Tenant farmers can apply without land papers through a Joint Liability Group. The bank fixes the credit limit based on the crop and the scale of farming. Never pay any agent for this application.

Frequently Asked Questions

Q1: What is the real interest rate on a KCC?
A: 7% a year on loans up to Rs 3 lakh, and with the 3% prompt repayment incentive the effective rate is 4% if you repay on time.

Q2: Is credit available without collateral?
A: Yes — up to Rs 2 lakh without collateral, and up to Rs 3 lakh where there is a recovery tie-up arrangement.

Q3: Can tenant farmers get a KCC?
A: Yes — tenant farmers, oral lessees and sharecroppers are eligible, especially through a Joint Liability Group.

Q4: Is KCC available for animal husbandry and fisheries?
A: Yes — since 2019, dairy, animal husbandry and fisheries farmers can also get a KCC, with the subsidised limit of Rs 2 lakh.