Before the launch of Kisan Rin Portal (KRP), farmers used to submit manual claims under the Interest Subvention and Prompt Repayment Incentive schemes to which of the following institution/s?

Question

UnlockIAS · Accepted Answer

Correct — B, Reserve Bank of India and NABARD. The Press Information Bureau's own account of the Kisan Rin Portal settles it in a sentence: previously, banks had to submit claims for Interest Subvention and Prompt Repayment Incentive manually to the Reserve Bank of India and NABARD, which caused significant delays and inefficiencies. The Commission gave the same reason when it disposed of objections to this paper on 31 October 2025, recording that before the portal the route ran through RBI for the nationalised banks and through NABARD for Regional Rural Banks and cooperative banks. That two-way split is the entire answer, and it is not arbitrary. RBI is the regulator of and settlement point for scheduled commercial banks, so their subvention claims were reimbursed through it. NABARD is the apex refinancing and supervisory institution for the rural cooperative credit structure and for RRBs, so claims arising in that channel terminated at NABARD. Note also what the stem's own wording implies: the claims were being filed by lending institutions on farmers' behalf, not walked in by farmers themselves. What was being claimed is the Modified Interest Subvention Scheme. A Kisan Credit Card short-term crop loan up to Rs 3 lakh is priced at 7 per cent with the government meeting the gap, and a farmer who repays on time earns a further 3 per cent Prompt Repayment Incentive, taking the effective rate down to 4 per cent. Someone has to reimburse the lender for that gap, and until September 2023 that reimbursement was a paper claim. The Kisan Rin Portal, launched by the Department of Agriculture and Farmers Welfare in September 2023, digitised submission, verification and settlement end to end: by 31 December 2024 it had processed claims worth Rs 1,08,336.78 crore and mapped about 5.9 crore MISS-KCC beneficiary farmers.

Why the other options are wrong — (a) Half right, which is exactly what makes it the trap. NABARD does belong in the answer, and the Department of Agriculture and Farmers Welfare genuinely owns the Modified Interest Subvention Scheme and built the Kisan Rin Portal in September 2023. But the ministry designs the scheme and funds it from the Budget; it was never the counter at which lending institutions filed their manual claims. Commercial banks filed with their regulator, the Reserve Bank of India. Substituting the ministry for RBI breaks the pair, and a paired option is only correct when both halves are.  (c) This one gets RBI right and the partner wrong. NPCI is India's umbrella retail-payments organisation — the operator behind UPI, RuPay, NACH and AePS — and candidates reach for it because 'digitised claim settlement' sounds like payments plumbing. But NPCI runs payment systems between banks; it does not administer an agricultural interest-subsidy scheme, does not receive subvention claims, and has no supervisory relationship with the Regional Rural Banks and cooperative banks whose claims NABARD handled.  (d) Options (a) and (c) each contain one correct institution, which is what tempts a candidate into treating (d) as the safe umbrella. But (d) asserts that more than one of the three listed pairs is correct as a pair, and only (b) names both bodies that actually received the claims. One right half does not make a right option, and at −1/3 for a wrong answer this hedge costs a third of a mark rather than saving one.

Concept: Institutional agricultural credit in India runs down three separate channels, and knowing which body sits at the head of each unlocks a whole class of questions. Scheduled commercial banks lend directly and answer to the Reserve Bank of India. Regional Rural Banks, set up from 1975, and the cooperative structure — State Cooperative Banks above District Central Cooperative Banks above Primary Agricultural Credit Societies — are refinanced and supervised by NABARD, established in 1982. The instrument at the retail end is the Kisan Credit Card, introduced in 1998, extended in 2019 to animal husbandry, dairying and fisheries, and offering collateral-free loans up to Rs 1.60 lakh. The subsidy mechanism is the piece candidates skip. Government does not lend cheap money itself; it lets banks lend below market rate and then reimburses them the difference, which is what 'interest subvention' means. A separate Prompt Repayment Incentive rewards farmers who repay on schedule. Both are therefore claims that a lender files after the fact, and a claims process needs a receiving institution for each channel — RBI for the commercial banks it regulates, NABARD for the rural institutions it refinances. The scale explains why the paperwork became unmanageable: institutional credit to agriculture rose from Rs 8.5 lakh crore in 2014-15 to Rs 25.48 lakh crore in 2023-24, and India had 7.75 crore operational KCC accounts carrying Rs 9.81 lakh crore of outstanding loans as of March 2024.

State PCS 2025 Q43 — Economy PYQ with Answer

State PCS 2025 Q43 — Economy PYQ with Answer