Kisan Credit Card accounts in PSBs down 1.8% to 22.5 million in FY25

Union Finance Minister Nirmala Sitharaman in her budget for FY26 increased the loan limit for farmers holding KCC to Rs 5 lakh from Rs 3 lakh earlier

The number of Kisan Credit Card (KCC) accounts in public sector banks fell by 1.8 per cent year-on-year to 22.5 million in FY25, even as the outstanding loan amount grew by a marginal 2.2 per cent growth to ₹41,300 crore during the period, a senior government official said on the condition of anonymity.

 

The decline in active KCC accounts reflects multiple structural shifts in rural lending, the official said. 

 

“Farmers’ incomes have improved over the years, with many moving out of farming, while in some states they increasingly prefer co-operative banks, NBFCs or input-linked credit like fertilier cards, reducing drawdowns from PSBs.”

 

“Many KCCs from the aggressive drives of the 2000s remained dormant or underutilised, prompting us to rationalise non-operative accounts to clean up portfolios and cut compliance overheads as advised by RBI and the finance ministry,” the official said. Another senior official at a public-sector bank said that KCC saturation mapping, geo-tagging and Aadhaar seeding have improved scrutiny, leading to weeding out of duplicate and ineligible accounts.

 

Some farmers have migrated to purpose-specific loans under PM-KISAN or the Agri Infrastructure Fund, while technology integration delays at branches, like incomplete digital documents or portal mismatches, have slowed renewals. Moreover, a large number of small-ticket NPAs, including those impacted by debt waivers, have been settled through one-time compromises, leading to closure of several accounts. 

An email sent to the finance ministry on the matter remained unanswered till the time of going to the press.

 

“Yes, the number of new KCC accounts has declined. This is primarily due to saturation in many areas. Over the past few years, there was a significant push from the government, and banks actively worked towards ensuring maximum coverage. As a result, most eligible farmers already have access to KCC facilities now. However, KCC remains a key instrument for crop loans, and for many farmers, it continues to be the natural and preferred choice for meeting agricultural credit needs,” Ashok Chandra, MD & CEO of Punjab National Bank, said in an interview to Business Standard last week.

 

The KCC scheme, launched in 1998, provides short-term crop loans to farmers engaged in agriculture and allied activities at a benchmark rate of 9 per cent.

 

Union Finance Minister Nirmala Sitharaman in the Budget for FY26 increased the loan limit for farmers holding KCC to ₹5 lakh from ₹3 lakh. While making the announcement, the minister said KCCs facilitate short-term loans for 77 million farmers, fishermen, and dairy farmers.

 

“To promote timely repayment of outstanding amounts in operative accounts of KCC, the farmers are provided 3 per cent prompt repayment incentives,” Pankaj Chaudhary, minister of state for finance, had said.