Kisan Credit Card Update: If you are a farmer, this news could be especially important for you. The central government has prepared to provide significant relief to farmers. Finance Minister Nirmala Sitharaman, in the budget presented on February 1, 2025, announced an increase in the short-term loan limit for Kisan Credit Card (KCC) holders. The government proposed increasing this limit from Rs 3 lakh to Rs 5 lakh. It is expected that this decision will be implemented from the next financial year, directly benefiting approximately 7.75 crore farmers.
Relief in Interest Rates
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According to reports, the government may also approve an interest subvention scheme to meet the daily needs of farmers related to farming. Under this scheme, farmers taking loans up to Rs 3 lakh will get a 1.5% reduction in interest rates. The aim is to increase the availability of credit in the agricultural sector and reduce the financial burden on farmers.
Officials say that the expenditure committee is considering the evaluation report related to the interest subvention scheme. It is expected that the increased limit for short-term credit for KCC holders will be implemented from the next financial year.
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Millions of Farmers to Benefit Directly
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According to information, a Kisan Credit Card holder takes an average short-term loan of approximately Rs 1.6 lakh. Currently, there are more than 7.71 crore active KCCs across the country, including farmers involved in agriculture, animal husbandry, and fisheries. In addition, the Reserve Bank of India has already increased the limit for collateral-free loans under KCC from Rs 1.6 lakh to Rs 2 lakh.
What the Finance Minister Said
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In her budget speech, the Finance Minister stated that approximately 77 million farmers, fishermen, and dairy farmers are benefiting from short-term loans through the Kisan Credit Card scheme. Under the revised interest subvention scheme, the KCC loan limit has been increased from Rs 3 lakh to Rs 5 lakh. How will the interest rate be determined?
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According to the revised interest subvention scheme of the Ministry of Agriculture, KCC holders can avail loans up to Rs 3 lakh for working capital needs at an annual interest rate of 7%. If the farmer repays the loan on time, they receive an additional 3% rebate. This reduces the effective interest rate to just 4%.
How to apply for a Kisan Credit Card?
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Applying for a Kisan Credit Card is quite easy. Interested farmers can apply online by visiting their bank’s official website or by obtaining a form from their nearest bank branch. Necessary documents such as Aadhaar card, Voter ID, or PAN card need to be submitted along with the application. The card is issued after the bank completes the verification process. Usually, the farmer receives the KCC within 15 to 20 days of application.