Kisan Credit Card: The increase in the KCC loan limit from Rs 3 lakh to Rs 5 lakh was announced by Finance Minister Nirmala Sitharaman on February 1 while presenting the Budget 2025. It is likely to be implemented from the next financial year. 

When will farmers be able to avail KCC loans up to Rs 5 lakh? The Finance Minister announced this in the budget.

Kisan Credit Card: While presenting Budget 2025 on February 1, Finance Minister Nirmala Sitharaman announced an increase in the short-term loan limit for Kisan Credit Card (KCC) holders from ₹3 lakh to ₹5 lakh, benefiting 77.5 million farmers. This government order is expected to be implemented starting next fiscal year. 

There will also be a discount on interest

According to a report in Financial Express, officials have stated that the Cabinet has approved an Interest Subvention Scheme for Agricultural Credit to meet farmers' working capital needs. Under this scheme, farmers taking loans up to 3 lakh rupees will receive an interest rebate of up to 1.5 percent.

The aim is to ensure adequate credit flow to the agriculture sector. An official told FE, "The Expenditure Finance Committee is considering the evaluation report for the interest subvention scheme. We are hoping that the increase in short-term credit for KCC holders will be implemented from the next financial year."

Crores of farmers will benefit

However, sources said that the average short-term credit flow per KCC holder is currently around ₹1.6 lakh. This means that each KCC holder currently takes an average loan of ₹1.6 lakh. The number of active KCCs in the country currently stands at 77.1 million, including farmers engaged in fisheries and animal husbandry. Furthermore, since January last year, the RBI has increased the limit for unsecured loans under KCCs from ₹1.6 lakh to ₹2 lakh.

Finance Minister Nirmala Sitharaman had said in her Budget speech for 2025-26, "KCC provides short-term loans to 77 million farmers, fishermen and dairy farmers. Under the Modified Interest Subsidy Scheme (MISS), the loan limit taken through KCC will be increased from Rs 3 lakh to Rs 5 lakh."

Under the Ministry of Agriculture's Modified Interest Subvention Scheme (MISS), KCC holders can avail loans up to ₹3 lakh for working capital needs at 7% interest. Farmers who repay their loans on time receive an additional 3% discount, bringing the effective interest rate down to 4%.

How to apply for Kisan Credit Card? 

• If you want, you can apply for it by visiting the official website of the bank, or you can visit any of your nearest branches.
• From here you will first have to take the form for the Kisan Card. 
• After this, it will have to be filled and submitted along with important documents like Aadhar Card, Voter ID, PAN Card.
• The card will be issued after bank verification.
• Usually the card is received within 15-20 days of applying.