Union Budget 2025: Kisan Credit Card (KCC) limit increased from Rs 3 to 5 lakh

Finance Minister Nirmala Sitharaman also announced a major update to the Kisan Credit Card (KCC) scheme, increasing the loan limit from ₹3 lakh to ₹5 lakh. This move is set to strengthen rural economies and support farmers with greater access to institutional credit.

Union Budget 2025 increases Kisan Credit Card limit to ₹5 lakh, empowering farmers with greater access to credit for sustainable farming and rural growth.

Union Budget 2025 increases Kisan Credit Card limit to ₹5 lakh, empowering farmers with greater access to credit for sustainable farming and rural growth.

Key Highlights of KCC Changes

  • Increased Loan Limit:
    The loan limit under the modified interest subvention scheme has been raised from ₹3 lakh to ₹5 lakh, benefiting 7.7 crore farmers, including fishermen and dairy farmers.
  • Enhanced Financial Flexibility:
    This increase provides farmers with more financial flexibility to invest in better inputs, modern equipment, and sustainable farming practices.
  • Reduced Dependence on Informal Lending:
    The move aims to reduce farmers’ reliance on high-interest informal loans by improving access to formal credit channels..

Expert Opinions on KCC Reforms

  • Ritika Nayyar, Partner at Singhania & Co.:
    “This initiative will strengthen rural economies and ensure long-term agricultural growth by providing financial flexibility and greater credit access.”
  • Ashwin Sapra, Partner at Cyril Amarchand Mangaldas:
    “The increased loan limit will help farmers meet immediate financial needs during crop cycles, reducing the burden of short-term financial pressures.”
  • Sandeep Chilana, Managing Partner at Chilana & Chilana Law Offices:
    “While the raised limit is a positive step, the key challenge will be ensuring smooth loan disbursal, especially for small and marginal farmers.”

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What is the Kisan Credit Card (KCC)?

  • Launched in 1998: Provides short-term crop loans at a benchmark interest rate of 9%, with government subsidies reducing the effective rate to 4% per annum.
  • Eligibility: Open to owner-cultivators, sharecroppers, tenant farmers, and members of self-help or joint liability groups engaged in agriculture, allied, or non-farm activities.
  • Collateral-Free Loans: The guarantee-free loan limit has been raised from ₹1.6 lakh to ₹2 lakh, reducing the need for collateral for smaller loans.

How to Apply for a Kisan Credit Card

  • Visit the official website of your preferred bank offering the KCC scheme.
  • Navigate to the ‘Kisan Credit Card’ section under agricultural finance.
  • Click ‘Apply Now’ and complete the application with personal, farming, and financial details.
  • Submit the form and note the reference number for tracking.
  • If eligible, the bank will contact you within 3-4 working days for verification.

This increase in the KCC loan limit is expected to empower farmers, promote sustainable agricultural practices, and ensure financial resilience in rural India.

Disclaimer: The information provided in this article is for general informational purposes only. It is not intended as financial or legal advice. Please consult your financial advisor before making any decisions.

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