Kisan Loan CIBIL Rules: Farmers across India often face financial challenges when it comes to arranging money for seeds, fertilizers, and other agricultural needs. Crop loans play a vital role in helping farmers manage their expenses. However, many farmers worry about their CIBIL score, fearing that a low score may prevent them from getting a loan. Now, the central government has clarified that farmers can still get crop loans even if their CIBIL score is low, especially for loans up to ₹3 lakh.
Government Clarification in Lok Sabha
During the Budget Session 2024–25 in Lok Sabha, Shiv Sena MPs Sanjay Haribhau Jadhav and Omprakash Bhupal Singh raised a concern about whether farmers are being denied loans due to poor credit history. Responding to this, the government said that banks do not reject crop loan applications solely based on CIBIL score, particularly for loans up to ₹3 lakh.
The government referred to a Reserve Bank of India (RBI) circular issued in 2014, which advises banks to check the Credit Information Report (CIR) before approving loans. However, it also emphasizes that this should not be the only deciding factor. Banks have been given the freedom to exercise flexibility and take a lenient approach toward farmers, especially those with smaller credit needs.
Major Relief Measures for Farmers
The government has introduced several steps to make crop loans more accessible and affordable:
- No Fees on Crop Loans up to ₹3 Lakh
Since 4 February 2019, the Finance Ministry has directed all banks to waive processing, documentation, and inspection charges on Kisan Credit Card (KCC) loans or crop loans up to ₹3 lakh. This has significantly reduced the burden on small and marginal farmers. - Unsecured Loan Limit Increased
In a recent circular dated 6 December 2024, the RBI raised the limit for unsecured agricultural loans from ₹1.6 lakh to ₹2 lakh, which means farmers can now get loans up to ₹2 lakh without offering any collateral. - Re-loan Possible After One-Time Settlement
If a farmer has previously defaulted but has cleared the loan through a one-time settlement, they may still be eligible for a new loan, depending on the bank’s internal policy.
What to Do If Facing Loan Issues
If a farmer is still facing difficulty in getting a crop loan due to a past default or low credit score, they are advised to:
- Visit their bank branch
- Meet with the branch manager
- Apply under the Kisan Credit Card (KCC) scheme
Banks have been asked to be farmer-friendly and flexible in their approach.
Conclusion
This new direction by the government is a big step toward supporting farmers financially. By allowing crop loans even with low CIBIL scores and removing extra charges, the government is helping more farmers access credit easily. It’s a positive move for India’s agriculture sector and gives confidence to farmers preparing for the upcoming crop season.
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