Index To RBI Circulars

RBI/2025-26/193
FIDD.CO.FSD.BC.No.10/05.02.001/2025-26

January 13, 2026

The Chairman/Managing Director/Chief Executive Officer
All Public Sector Banks, Private Sector Banks and
Small Finance Banks

Madam/Dear Sir,

Modified Interest Subvention Scheme for Short Term Loans for Agriculture and Allied Activities availed through Kisan Credit Card (KCC) during the financial year 2025-26

Please refer to our circular FIDD.CO.FSD.BC.No.8/05.02.001/2024-25 dated August 06, 2024 conveying the decision of the Government of India for continuation of the Modified Interest Subvention Scheme for short term loans for agriculture and allied activities for the year 2024-25.

2. In this regard, it is advised that Government of India has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26 with the following stipulations:

(i) In order to provide short term crop loans and short term loans for allied activities including animal husbandry, dairy, fisheries, bee keeping etc. upto an overall limit of ₹3 lakh to farmers through KCC at concessional interest rate during the year 2025-26, it has been decided to provide interest subvention to 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 computerized Primary Agriculture Cooperative Societies (PACS) ceded with Scheduled Commercial Banks (SCBs), on use of their own resources. This interest subvention will be calculated on the loan amount from the date of its disbursement/drawal/renewal up to the date of actual repayment of the loan by the farmer or up to the tenure/ due date/renewal of loans fixed by the banks/PACS, whichever is earlier, subject to a maximum period of one year. The applicable lending rate to farmers and the rate of interest subvention for the financial year 2025-26 will be as follows:

(ii) An additional interest subvention of 3% per annum will be provided to such of those farmers repaying in time, i.e., from the date of disbursement/drawl/renewal of the loan/s upto the actual date of repayment/tenure/due date or upto the due date fixed by the banks for repayment of such loan/s, whichever is earlier, subject to a maximum period of one year from the date of disbursement. This also implies that the farmers repaying promptly as above would get short term crop loans and/or short term loans for allied activities including animal husbandry, dairy, fisheries, bee keeping etc. @ 4% per annum during the financial year 2025-26. This benefit would not accrue to those farmers who repay their agri loans after one year of availing such loans.

(iii) Interest subvention and prompt repayment incentive benefits on short term crop loans and short term loans for allied activities will be available on an overall limit of ₹3 lakh per annum subject to a maximum sub-limit of ₹2 lakh per farmer in respect of those farmers involved only in activities related to animal husbandry, dairy, fisheries, bee keeping etc. The limit for crop loan component will take priority for interest subvention and prompt repayment incentive benefits and the residual amount will be considered towards allied activities including animal husbandry, dairy, fisheries, bee keeping etc. subject to the cap as mentioned above. (Illustrations)

(iv) In order to discourage distress sale by farmers and to encourage them to store their produce in warehouses, the benefit of interest subvention under KCC will be available to small and marginal farmers for a further period of upto six months post the harvest of the crop against negotiable warehouse receipts on the produce stored in warehouses accredited with Warehousing Development Regulatory Authority (WDRA), at the same rate as applicable to the crop loan from the date of pledge.

(v) To provide relief to farmers affected by natural calamities, the applicable rate of interest subvention for that year will be made available to banks for the first year on the restructured loan amount. Such restructured loans will attract normal rate of interest from the second year onwards.

(vi) However, to provide relief to farmers affected due to severe natural calamities, the applicable rate of interest subvention for that year will be made available to banks for first three years/entire period (subject to a maximum of five years) on the restructured loan amount. Further, in all such cases, the benefit of prompt repayment incentive @3% per annum shall also be provided to the affected farmers. The grant of such benefit in cases of severe natural calamities shall, however, be decided by a High Level Committee (HLC) based on the recommendations of the Inter-Ministerial Central Team (IMCT) and Sub Committee of National Executive Committee (SC-NEC).

3. Further, banks are advised to adhere to the following stipulations:

(i) Mandatory Aadhaar Authentication: Aadhaar seeding and authentication are mandatory for availing benefits under the scheme. All lending institutions must ensure that e-KYC is completed for every farmer to enable seamless access to scheme benefits.

(ii) Validation of Multiple Accounts of beneficiaries: A farmer shall be eligible to receive MISS benefit through multiple KCC subject to an overall limit of ₹3 lakh per farmer across all such accounts. However, he/she shall be eligible to receive MISS benefits for a specific land parcel through only one Kisan Credit Card (KCC) account. In cases where a farmer maintains multiple KCC accounts linked to the same land parcel, MISS benefit shall be extended only to the account with the highest sanctioned loan amount, subject to the overall limit.

(iii) Encouraging Digital Transactions: Banks may encourage farmers to utilize all available digital banking channels, including RuPay cards, for seamless account operations and transactions.

(iv) Reporting of Data: Banks are advised to capture and report the requisite granular data of individual farmer beneficiaries under the scheme, including their social category, on the KRP and ensure that such data is not changed in subsequent periods. This data should be reported accurately to facilitate the settlement of audited MISS claims for the year 2025–26.

(v) Accurate Crop Reporting on KRP: Field functionaries must exercise due diligence in accurately reporting the data on crops sown on the KRP. Failure to do so may lead to validation errors at a later stage.

(vi) Submission of MISS Claims on KRP: All eligible financial institutions shall strictly follow the operational instructions and ensure timely uploading of MISS claims on KRP, duly certified by their Statutory Auditors as true and correct, as per date notified from time to time.

(vii) Submission of Claims by PACS Ceded with SCBs: The claims in respect of computerized 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 KRP module.

Yours faithfully,

(R. Giridharan)
Chief General Manager

Illustrations

Illustration I

Overall KCC limit - ₹2.5 lakh
Limit under Crop loan - ₹1.5 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹1 lakh IS and PRI benefit will be available on overall ₹2.5 lakh i.e.

• ₹1.5 lakh -Crop loan + ₹1 lakh- Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries

Illustration II

Overall KCC limit - ₹3 lakh
Limit under Crop loan - ₹0.5 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹2.5 lakh IS and PRI benefit will be available on overall ₹2.5 lakh i.e.

• ₹0.5 lakh - Crop loan + ₹2 lakh - Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries

Illustration III

Overall KCC limit - ₹4 lakh
Limit under Crop loan - ₹1.75 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries– ₹2.25 lakh IS and PRI benefit will be available on overall ₹3 lakh i.e.

• ₹1.75 lakh -Crop loan + ₹1.25 lakh - Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries

Illustration IV

Overall KCC limit - ₹4.5 lakh
Limit under Crop loan - ₹2 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹2.5 lakh IS and PRI benefit will be available on overall ₹3 lakh i.e.

• ₹2 lakh - Crop loan + ₹1 lakh - Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries

Illustration V

Overall KCC limit - ₹4 lakh
Limit under Crop loan - ₹3.15 lakh
Sub-limit under Animal Husbandry and/or Dairy and/or Bee keeping and/or Fisheries – ₹0.85 lakh IS and PRI benefit will be available on overall ₹3 lakh for crop loan component only