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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