Crop Loan and Interest Subvention 2026

Reviewed on 2026-06-20 by Dr. Shrawan Kumar Pathak.

Most farmers hear “subsidy” and picture a form, an officer and a long wait. The interest subvention is nothing like that. It is a built-in discount on the price of your crop loan. Your job is simply to know the right price and check that your bank is charging it.

So let us do the sum the way you would at a shop counter. You borrow money for the kharif or rabi season on your Kisan Credit Card (KCC). The bank's sticker price for that money, up to Rs 3 lakh, is 7 percent a year. The Government quietly pays part of that price to your bank for you. Pay your dues on time and a second discount lands on top. What you actually carry is 4 percent.

Here is the cost on a one-year crop loan, so you can spot if you are being overcharged.

• At 7 percent the interest for the year is Rs 7,000.
• Repay on time and the 3 percent prompt repayment incentive (PRI) takes Rs 3,000 off.
• Your net interest is Rs 4,000, that is 4 percent.

• At 7 percent the year's interest is Rs 21,000.
• The 3 percent incentive for timely repayment is Rs 9,000.
• You actually pay Rs 12,000, again 4 percent.

The discount is not loose cash handed to you. The 1.5 percent interest subvention goes from the Government to your bank, and the 3 percent incentive is adjusted in your loan account when you repay on schedule. You never file a separate claim for it.

From 1 April 2025 the loan limit under the scheme was raised from Rs 3 lakh to Rs 5 lakh. But the flat 7 percent and the 4 percent net rate apply to the slice up to Rs 3 lakh. On the amount above Rs 3 lakh and up to Rs 5 lakh, your bank charges its own benchmark lending rate, capped at 10 percent. So do not assume the whole Rs 5 lakh is at 4 percent. Ask your branch to show you the rate on each slab in writing and verify the current figure on your bank's KCC sheet.

The concession rides on the Kisan Credit Card, so the eligibility is really KCC eligibility:

• Owner-cultivators, tenant farmers, oral lessees and sharecroppers.
• Self-help groups or joint liability groups of farmers.
• Farmers in allied lines, animal husbandry, dairy and fisheries, get the interest benefit on a loan up to Rs 2 lakh when there is no crop loan.

If you are already a PM-KISAN beneficiary, the simplified one-page KCC form makes the card quicker to get. Your land record, Aadhaar and a passport photo are the usual papers.

KCC is issued by commercial banks, regional rural banks and cooperative banks. Go to the branch where you already hold an account, or apply online through that bank's KCC page.

Use the short PM-KISAN linked form if you qualify. Attach proof of land or cultivation, identity and your bank passbook.

The bank fixes your credit limit on a scale of finance for your crop and acreage. The card lets you draw and repay through the season.

The 3 percent incentive is the part you control. Clear the dues by the due date in your sanction letter. Miss it and you lose the incentive and pay the full 7 percent for that year.

A KCC limit is reviewed yearly. Renew it so the concessional rate keeps flowing for the next season.

Figure: step-by-step flow. If a step stalls, use the grievance or RTI route shown.

The most common complaint is a bank charging more than 7 percent on the eligible amount, or quietly dropping the 3 percent incentive after on-time repayment. Do not just argue at the counter.

1. Ask the branch, in writing, for the rate applied and the reason for any refusal.
2. File a complaint with the bank's grievance cell and note the ticket number.
3. If there is no fair reply in 30 days, escalate to the RBI Ombudsman at cms.rbi.org.in under the Integrated Ombudsman Scheme.
4. For scheme records, a public-sector bank is a public authority, so you can file an RTI to it, or to the Department of Agriculture and Farmers Welfare, for the subvention rules applied to your account.

Keeping your land and farmer records clean makes every step easier. It helps to register on the Farmer ID and Agristack registry and to hold a current Soil Health Card, both of which banks increasingly check at KCC renewal.

The bank lends at 7 percent on the amount up to Rs 3 lakh. You only reach the 4 percent net rate by repaying on time, which earns the 3 percent prompt repayment incentive. Default on the date and you stay at 7 percent for that year.

No. There is no separate subvention form. The 1.5 percent goes from the Government to your bank and the 3 percent incentive is adjusted in your KCC account when you repay on schedule. The concession is built into the card.

No. The 4 percent net rate applies to the slice up to Rs 3 lakh. On the part above Rs 3 lakh up to Rs 5 lakh, your bank uses its own benchmark rate, capped at 10 percent. Verify each slab's rate on your bank's KCC sheet.

If you take a KCC purely for animal husbandry, dairy or fisheries and have no crop loan, the interest benefit applies on the loan up to Rs 2 lakh. See our Animal Husbandry KCC guide for that route.

Yes. Tenant farmers, oral lessees, sharecroppers and members of joint liability or self-help groups can hold a KCC and get the concessional rate, subject to your bank's documentation for cultivation.

Get the applied rate in writing, raise it with the bank's grievance cell, and if it is not fixed within 30 days, complain to the RBI Ombudsman at cms.rbi.org.in. You can also file an RTI to the bank for the rate records on your account.

Plan your sale and repayment together. Check live rates on our mandi price guide so you sell at a fair rate and clear your KCC dues before the due date.

• https://www.pmindia.gov.in/en/news_updates/cabinet-approves-continuation-of-modified-interest-subvention-scheme-miss-for-fy-2025-26-with-existing-1-5-interest-subvention-is/
• https://agriwelfare.gov.in
• https://www.pmkisan.gov.in
• https://cms.rbi.org.in