RBI Extends Kisan Credit Card Interest Subvention Scheme For FY26: Here Are The Key Features

The Reserve Bank of India has advised the continuation of the Modified Interest Subvention Scheme (MISS) for short-term loans availed by farmers for agriculture and allied activities during the financial year 2025-26. To avail interest subvention, farmers are required to borrow through the Kisan Credit Card (KCC).

The scheme, which is approved by the Government of India, was introduced with the objective to support farmers by offering loans of up to Rs. 3 lakh at concessional interest rates.

What Are The Key Features Of The Scheme

The interest subvention is only applicable for short-term loans of up to one year. Farmers can access short-term loans for their crops and other allied activities. This includes animal husbandry, dairy, fisheries, and beekeeping. These loans are available to farmers at a concessional interest rate of 7 per cent per annum.

Lenders will also receive an interest subvention of 1.50 per cent. “Lending institutions, viz., Public Sector Banks (PSBs) and Private Sector Banks (in respect of loans given by their rural and semi-urban branches only), Small Finance Banks (SFBs) and computerised Primary Agriculture Cooperative Societies (PACS) ceded with Scheduled Commercial Banks (SCBs), on use of their own resources,” said RBI.

Incentives For Repaying Timely

The scheme favours farmers who are able to repay their loans in a timely manner. Farmers who repay their loans within a year will be able to receive an additional interest discount of 3 per cent. This will effectively reduce their rate of interest to just 4 per cent per annum from the 7 per cent subvention, the RBI said. This additional subvention cannot be received by farmers who take more than a year to repay their loans.

Limits on loans

The interest subvention incentive is available for an overall limit of Rs. 3 lakh per annum for agricultural loans to farmers. Farmers who are solely engaged in allied agricultural activities are eligible for a sub-limit of loans up to Rs. 2 lakh per year for an individual farmer.

Priority for the loans with interest subvention will be given to crop loans. Any remaining amount will be available for allied activities.

Small and marginal farmers storing their produce in accredited warehouses can also avail themselves of an interest subvention for up to six months after the harvest. These loans will be available against negotiable warehouse receipts. This was done with the aim of discouraging distress sales by these farmers.

Relief against natural calamities

In order to provide relief to farmers who are affected by natural calamities, the interest rate subvention will be applicable for the first year. But from the second year onwards, a normal interest rate will be applicable on restructured loan amounts.

However, the RBI said that in case of severe natural calamities, the interest rate subvention will extend up to three years. A maximum of five years can also be given on the restructured amount. Additionally, in these cases, an incentive of 3 per cent subvention will also be provided for prompt repayment. The grant of such benefits will be decided by the high-level committee based on recommendations from relevant authorities.

Documentation and reporting requirements

The RBI said that banks must ensure that farmers availing benefits under the scheme have completed e-KYC processes. Aadhaar seeding and authentication are mandatory for farmers to avail benefits under the initiative.

Farmers are eligible to receive the benefit through multiple KCCs, provided that the overall limit of Rs. 3 lakh per annum for every farmer is adhered to. However, for a specific land parcel, the benefit of the scheme can only be availed through a single KCC account, and in case there are multiple KCCs linked to a single land parcel, the Rs. 3 lakh limit should be adhered to.

Banks must track and report detailed data on individual beneficiaries under the scheme through the Kisan Rin Portal, which includes the social category of the farmers. This data must be reported accurately for the ease of settlement of audited claims for FY26.

“The claims in respect of computerised PACS ceded with SCBs may be uploaded separately by the respective banks, with the certification that interest subvention/prompt repayment incentive is being claimed on loans for which no refinance has been availed from NABARD, duly certified by the banks’ Statutory Auditors, through the KRP module,” RBI said.