Under the guidelines, states are required to release 50% of their premium subsidy in advance based on the previous season’s figures for each insurance company. Subsequent installments follow the seasonal schedule specified in the operational guidelines. The insurance companies confirm receipt of the advance premium on the National Crop Insurance Portal (NCIP), and enrolment for farmers begins only after such confirmation.
Current Implementation Status
As of now, 20 of the 24 PMFBY-implementing states have opened Escrow Accounts and are utilizing them for deposit and disbursement of their premium subsidy shares since Kharif 2025. The accounts are managed by the respective state Agriculture or Horticulture Departments and can be opened in Scheduled Commercial Banks or Cooperative Banks based on state preference. Multi-party agreements are executed among the state departments, banks, and implementing insurance companies.
The Union Territories and states of Andaman & Nicobar Islands, Manipur, Mizoram, and Sikkim are yet to operationalize Escrow Accounts under PMFBY.
Impact and Future Outlook
Since the Escrow Account mechanism has been recently operationalized, an impact analysis is not yet available. However, the government anticipates that the system will enhance transparency, timely subsidy release, and smoother enrollment for farmers under PMFBY.