The RBI issued revised guidelines on the Kisan Credit Card (KC

Under the applicable interest subvention framework for eligible short-term agricultural loans, farmers may receive concessional credit at the prescribed lending rate. The Government provides interest subvention to eligible lending institutions, while an additional prompt repayment incentive is available to eligible farmers who repay on time. Where a farmer receives a 3% prompt repayment incentive on a loan carrying a 7% concessional interest rate, the effective interest burden for the prompt-paying farmer becomes 4% per annum, subject to scheme conditions. The interest subvention paid to lending institutions should not be described as making the “effective rate to banks 5.5%,” because the subvention is financial support provided to eligible lending institutions under the scheme framework.