March 17, 2016
The Chairman/Managing Director/Chief Executive Officer
All Scheduled Commercial Banks
(excluding Regional Rural Banks)
Madam / Dear Sir,
Pradhan Mantri Fasal Bima Yojana
As you are aware, Government of India has recently approved Pradhan Mantri Fasal Bima Yojana (PMFBY) which would replace the existing schemes of National Agricultural Insurance Scheme (NAIS) & Modified National Agricultural Insurance Scheme (MNAIS) from Kharif 2016. PMFBY would be available to the farmers at very low rates of premium which would be maximum upto 1.5% for Rabi and upto 2% for Kharif for Food crops, Pulses and Oilseeds and upto 5% for Annual Horticulture/ Commercial Crops. This scheme would provide insurance cover for all stages of the crop cycle including post-harvest risks in specified instances.
2. Further, Weather Based Crop Insurance Scheme (WBCIS) has also been modified and the premium payable by the farmers as also its administrative provisions and operationalisation process have been brought on par with PMFBY. In addition, a Unified Package Insurance Scheme (UPIS) has also been approved for implementation on pilot basis in 45 districts of the country to cover other assets/activities like machinery, life, accident, house, student-safety and crops etc. of farmers.
3. The Scheme and detailed Operational Guidelines are available on the GOI’s websites www.agricoop.nic.in & www.agri-insurance.gov.in . Guidelines of Pilot UPIS are being prepared by GOI and will be circulated separately.
4. Banks have a vital role to play in increasing the coverage under the scheme. As the scheme is compulsory for loanee farmers availing Seasonal Agricultural Operational (SAO) Loans/Kisan Credit Card (KCC) holders for the notified crops in notified areas, 100% coverage of loanee farmers in notified areas growing notified crops is required to be done by all concerned bank branches. This scheme is voluntary for non-loanee farmers, but there is a prerequisite in the scheme that they should have an account to be eligible for coverage. Under the Pradhan Mantri Jan Dhan Yojana (PMJDY), most of these poorest of the poor farmers have got their bank accounts opened and the banks have to focus on supporting these farmers in getting crop insurance including guiding them through the entire process. The detailed role and responsibilities of the Rural Financial Institutions including Commercial Banks and Regional Rural Banks have been defined in the Operational Guidelines of the Scheme including specified seasonality discipline for acceptance of proposals/premium, remittance of premium along with consolidated proposals to the concerned Implementing Insurance Companies, uploading of requisite details of insured farmers on Crop Insurance Portal and credit of claim amount in the accounts of the farmers for effective implementation of the schemes.
5. Another issue which needs to be addressed is the lack of compilation of land details and crop sown details of the loanee farmers availing crop loan by the Banks which has resulted in non-availability of requisite data on real time basis for monitoring and planning purposes. This scheme is intricately linked to crop loans taken by farmers through KCC and de-duplication of these accounts and stopping multiple insurance coverage against such accounts is equally important. In the present system banks are using different formats for capturing requisite data of land and crop details of farmers which is not accessible on the system for all concerned agencies for cross verification. Developing an integrated IT Platform for capturing all relevant data by concerned agencies including financial Institutions, insurance companies, State Governments and Government of India and its access to all concerned along with seeding of Aadhar Number of the farmers will go a long way in providing real time data with no scope of duplication & shall also speed up payment of claims to the affected farmers. A Crop Insurance Portal www.agri-insurance.gov.in has been operationalised by GOI for effective administration of the Crop Insurance Programme but its integration with banks is essential for capturing the requisite data/information on real time basis. In view of the above Government of India has proposed to initiate development of an integrated platform on a pilot basis for providing real time information at one place for use by all agencies.
6. You are advised to ensure strict compliance by your bank of the provisions of the Schemes/Guidelines and ensure coverage of 100% of defined loanee farmers along with good number of non-loanee farmers with effect from April 1, 2016 to achieve the defined objectives and targets fixed under the Scheme.
Principal Chief General Manager