Government in talks with banks to reduce Kisan Credit Card interest subsidy

The government is in preliminary discussions with banks to reduce interest subvention on Kisan Credit Card loans by 50 basis points. The move aims to align agricultural credit subsidies with recent policy rate cuts announced by the Reserve Bank of India.

Currently, banks receive a 1.5% subsidy to offer Kisan Credit Card loans at 7% interest. The reduction forms part of broader discussions on extending the scheme until 2031-32. The government has indicated that farmers with prompt repayment records will continue to receive additional interest benefits.