Regular Update
New Delhi: Under the revised Pradhan Mantri Fasal Bima Yojana (PMFBY), an Escrow Account System will be implemented starting from the Kharif season 2025. With this new system, states and Union Territories must ensure that their share of the insurance premium subsidy is paid on time.
According to the revised operational guidelines issued in 2023, states and Union Territories are required to deposit their share of the crop insurance premium in advance into an escrow account. This ensures that insurance companies have certainty about the availability of funds and that farmers receive insurance coverage on time.
How will the escrow account work?
- For each season, states must make an advance financial commitment of their liability.
- Based on the premium subsidy of the corresponding previous season, 50% of the amount will be deposited in advance into the escrow account.
- The remaining installments will be released later as per the guidelines.
- The insurance company will verify the deposited amount on the National Crop Insurance Portal (NCIP).
- Farmer registration will begin only after this verification is completed.
Current status
- Out of the 24 states implementing PMFBY, 20 states have opened escrow accounts.
- These states are using the escrow accounts for depositing and distributing premium subsidies from Kharif 2025 onwards.
- The State Agriculture and Horticulture Departments manage these escrow accounts.
- The accounts are opened in scheduled commercial banks or cooperative banks.
- State governments sign multi-party agreements with the concerned banks and insurance companies.
Regions not yet participating
- The Andaman & Nicobar Islands, along with the states of Manipur, Mizoram, and Sikkim, have not yet opened escrow accounts under PMFBY.
Impact assessment not yet possible
- Since the escrow account system has been implemented only from **Kharif 2025**, the government has stated that it is **too early to assess its full impact.
This information was provided by Minister of State for Agriculture and Farmers Welfare, Ramnath Thakur, in a written reply in the Rajya Sabha.
