(THE GIST OF PIB) Modified Interest Subvention Scheme

(MAY-2025)

Recently, the Union Cabinet approved the continuation of the Interest Subvention (IS) component under the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26.

It is a Central Sector Scheme
It is aimed at ensuring the availability of short-term credit to farmers at an affordable interest rate through Kisan Credit card (KCC).

Farmers received short-term loans of up to 3 lakh through Kisan Credit Cards (KCC) at a subsidized interest rate of 7%, with 1.5% interest subvention provided to eligible lending institutions.
Additionally, farmers repaying loans promptly are eligible for an incentive of up to 3% as Prompt Repayment Incentive (PRI) effectively reducing their interest rate on KCC loans to 4%.
For loans taken exclusively for animal husbandry or fisheries, the interest benefit is applicable up to Rs.2 lakh.
No changes have been proposed in the structure or other components of the scheme.
The scheme is implemented and monitored by the Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD).
Through Public Sector Banks, Regional Rural Banks (RRBs), Cooperative Banks and Private Sector Banks operating in rural and semi urban areas, they ensure that the interest subvention benefits reach the farmers.