Kisan Credit Card (KCC) issuance has plummeted by 56% over three years despite sanctioned amounts increasing 5-fold. West Bengal, Tripura, and Assam witnessed 80% decline in new cards. Launched in 1998 by NABARD, KCC provides farmers credit for seeds, fertilizers, pesticides, and short-term loans at affordable rates. Key reasons for decline: increased defaults, tightened NABARD guidelines, reduced crop production, complex application formalities requiring land ownership proof, and competition from NBFCs/MFIs offering flexible alternatives with better customer support.

The Kisan Credit Card scheme's dramatic decline reflects deeper structural challenges in agricultural financing. While the scheme expanded credit availability (sanctioned amounts up 5x), actual card issuance dropped 56%, indicating a disconnect between policy intent and ground reality. This paradox stems from multiple factors: farmers' deteriorating creditworthiness due to climate shocks and existing debt burdens, NABARD's risk-averse regulatory tightening following consecutive high loan defaults, and institutional competition from agile NBFCs/MFIs offering doorstep services without complex documentation. The requirement for land ownership proof particularly excludes tenant farmers and sharecroppers - a significant agricultural workforce segment. The March-end lump sum repayment structure misaligns with farmers' seasonal income flows, creating artificial barriers. This trend signals a broader transformation in rural credit markets, where traditional institutional credit faces competition from flexible microfinance models. For NABARD Grade A aspirants, this case study exemplifies how well-intentioned schemes can face implementation challenges, requiring policy recalibration to balance financial inclusion with institutional sustainability. The KCC decline represents the evolving dynamics between formal banking sector prudential norms and grassroots credit access needs.