Union Budget 2025-26 : Kisan Credit Card Limit Enhanced To Rs 5 Lakh

During the Union Budget 2025-26 session, Finance Minister Nirmala Sitharaman has announced a revised loan limit for the Kisan credit cards to strengthen the agriculture sector. The credit limit has been increased to Rs 5 lakhs from the previous Rs 3 lakhs, expecting the extra credit availability to meet the financial needs of small and marginal farmers.

Introduced in 1998, this government scheme provides short-term and long-term credit to farmers for purposes related to crop cultivation, post-harvest expenses, consumption requirements, capital expenditure, etc.

The scheme was extended in 2004 to meet investment requirements of the farmers. It is implemented by commercial banks, Regional Rural Banks, Small Finance Banks and Co-operatives.

The interest rate provided on Kisan credit cards varies from bank-to-bank. It comes with an interest subvention scheme of 2 per cent for short term crop loans and a prompt repayment incentive of 3 per cent to the farmers.

During the fiscal year 2024-25, the lending rate was 7 percent to the farmers with a rate of interest subvention of 1.50 percent to the lending institutions.

In the past few years, the scheme was revamped to include an ATM-enabled RuPay debit card, structured cost escalation, and any number of withdrawals within the limit.