Kisan Credit Card: Farmers to Get Collateral-Free Loan of Rs 2 Lakh in 2025

Key Highlights

• Farmers can get up to Rs 2 lakh collateral-free loan from January 2025.
• RBI has increased the loan limit from Rs 1.6 lakh.
• No security or assets required to avail the loan.
• The initiative will benefit over 86% of small and marginal farmers.
• Farmers can apply for the loan online or offline using Kisan Credit Card.

In a major development for farmers in India, the Reserve Bank of India (RBI) has announced that farmers holding a Kisan Credit Card (KCC) will soon be able to avail of a collateral-free loan of up to Rs 2 lakh starting January 1, 2025. This decision is set to benefit millions of farmers, especially small and marginal farmers, by providing easier access to loans without the need for security or collateral.

Also Read: UP Sponsorship Yojana: Rs 4,000 Monthly Aid for Children in Need; Eligibility and Application Process Explained

RBI's New Decision for Farmers

Starting from the new year, farmers will have the opportunity to borrow up to Rs 2 lakh through the Kisan Credit Card scheme. Previously, the limit was Rs 1.6 lakh. This increase will allow farmers to access more funds for their agricultural needs without having to pledge any assets. The initiative is expected to support over 86% of small and marginal farmers in India, who will now be able to invest more in their farming activities.

Collateral-Free Loan Explained

A collateral-free loan means that farmers will not need to provide any form of security, such as land or property when applying for the loan. This makes the loan process easier and more accessible, especially for those who do not have additional assets to pledge.

Instructions to Banks

The RBI has directed banks to implement these changes swiftly and ensure the new loan limits are applied to eligible farmers. Banks have also been instructed to waive additional security and margin requirements for loans up to Rs 2 lakh. Furthermore, the RBI has asked banks to actively publicize these changes to ensure farmers are aware of the new opportunity.

Also Read: Farmers to Get Increased Compensation for Land Acquired for Noida International Airport

Aim of the RBI Initiative

This step is part of the RBI’s effort to reduce the cost of agriculture and improve access to loans for farmers. By increasing the loan limit, the RBI aims to ensure that farmers have the necessary financial resources to meet their operational and developmental needs. The move is expected to promote the growth of small and marginal farmers and help them expand their farming activities.

Expert Opinions

Agricultural experts have hailed this move, saying that it will reduce the financial burden on farmers and provide them with better access to capital for farming. This will, in turn, support agricultural growth and alleviate the pressure caused by rising input costs. The decision is also seen as a positive step towards increasing credit inclusion in the agricultural sector.

How to Apply for the Loan?

Farmers can apply for the Rs 2 lakh loan starting January 1, 2025, by visiting any bank. No collateral is required to apply for the loan. Farmers can also benefit from the government's interest subsidy scheme, which offers loans at an effective interest rate of 4% for amounts up to Rs 3 lakh.

Additionally, farmers can apply for the Kisan Credit Card (KCC) by filling out the application form available on the PM Kisan website (https://pmkisan.gov.in/). The form requires details such as Aadhaar, land documents, PAN card, photograph, and mobile number.

Also Read: Good News for Gram Panchayats: 58 Lakh Villagers to Receive Land Pattas

CMV360 Says

The RBI’s decision to increase the loan limit for Kisan Credit Cards is a significant step in empowering farmers across the country. With easier access to credit, farmers will be better equipped to improve their productivity, reduce costs, and enhance their livelihoods. The move is a win for India's agricultural sector, especially for those who need financial assistance to boost their farming efforts.