Govt in talks with banks to cut Kisan Credit Card interest subvention by 50 basis points
The government is discussing a 50 basis point reduction in interest subvention for Kisan Credit Card loans. This move aims to align subsidies with recent policy rate cuts by the Reserve Bank of India. Banks currently receive a 1.5% subsidy to offer loans at a 7% interest rate. Discussions are preliminary and part of extending the scheme until 2031-32. Farmers repaying promptly will continue to…
The Indian government is engaging in talks with banks to lower the interest subvention on Kisan Credit Card (KCC) loans by 50 basis points, following the Reserve Bank of India's (RBI) reduction in the policy rates. The RBI has reduced the repo rate by 125 basis points to 5.25% since February 2025. The government currently provides a 1.5% interest subvention to banks for extending KCC loans up to ₹3 lakh at a 7% interest rate.
This reduction, if approved, would bring the interest rate down to 6.5%. The discussions are preliminary and part of the government's broader policy measures to continue the MISS-KCC scheme until 2031-32. The scheme's total subsidy outlay is estimated at ₹1.87 lakh crore till 2024-25, with ₹22,600 crore allocated for the 2026-27 budget.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
