RBI releases New KCC Guidelines, Time of KCC Loan increased

The Reserve Bank of India (RBI) has released new guidelines for KCC. The RBI has increased the time of the KCC loan. The important points are:

• To bring in uniformity in loan sanction and repayment schedules, crop seasons have been standardized in terms of months i.e. short duration crops (12 months) and long duration crops (18 months)
• To ensure proper dovetailing of loan tenure with crop seasons especially for the longer duration crops, the tenure of KCC has been extended to 6 years.
• To ensure that farmers receive adequate credit based on actual cost of cultivation, drawing limits under KCC has been aligned with the scale of finance for each crop season.
• To enable farmers to access finance for technological interventions such as soil testing, real time weather forecasts and organic/good agricultural practices certification etc such expenses has been added as eligible components within 20% additional component towards repairs and maintenance of farm assets.

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