RBI Modified Interest Subvention Scheme 2025

The RBI Interest Subvention Scheme (ISS), recently continued as the Modified Interest Subvention Scheme (MISS) for 2025-26, provides concessional short-term loans to farmers, mainly through the Kisan Credit Card (KCC) platform, at subsidized interest rates. The scheme is a critical support for small and marginal farmers to promote financial inclusion and agricultural productivity.

Scheme Overview

MISS is a Central Sector Scheme aimed at making short-term institutional credit affordable for farmers and allied sectors. It applies to crop loans, animal husbandry, and fisheries, offering interest subvention and special incentives for prompt repayment.

Key Features

• Loan Limit: Short-term loans up to ₹3 lakh for crop and allied activities per farmer through KCC; for animal husbandry and fisheries, the benefit is available up to ₹2 lakh.

• Interest Rate: Loans are extended at a base rate of 7% per annum.

• Interest Subvention: Banks are provided with a 1.5% interest subvention, which lowers the effective borrowing cost for farmers.

• Prompt Repayment Incentive (PRI): An additional 3% interest subvention is offered for timely repayment, reducing the effective interest rate to 4% for the borrower.

• Coverage: Available through Public Sector Banks, Private Banks, Regional Rural Banks (RRBs), Cooperative Banks, and Small Finance Banks.

• No Structural Changes for FY 2025-26: The latest extension keeps the same structure and benefit pattern as previous years.

Implementation and Monitoring

• Nodal Agencies: The scheme is implemented by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD), with claims processed through the Kisan Rin Portal (KRP) for transparency and digital tracking.

• Eligibility: Farmers must have Aadhaar linkage for availing benefits and should obtain loans through eligible institutions.

• Reporting: Lending institutions must submit certified claims via KRP, and statutory audit of claims is required by June 30 of the following year.

Special Provisions

• Natural Calamities: Interest subvention is also extended to loans restructured due to natural calamities for a period up to one year, and may be prolonged for severe events.

• Warehouse Support: The scheme supports small/marginal farmers in storing their produce in accredited warehouses for up to six months post-harvest.

Significance

• Financial Inclusion: The scheme supports more than 7.5 crore KCC holders and ensures that small and marginal farmers get access to affordable credit, thus boosting agricultural productivity and rural livelihoods.

• Digital Reforms: Introduction of the Kisan Rin Portal has improved transparency and expedited claim settlements.

• Continued Government Support: The unchanged benefits and ongoing support indicate a commitment to sustained farm credit delivery and rural sector strength in India.