Statement (I) is incorrect: The method of determining the present worth (present value) of future revenues to make them comparable with current investment costs is known as DISCOUNTING ($PV = FV / (1 + r)^n$), not compounding.
Statement (II) is incorrect: The mathematical process by which present sums/costs are grown forward in time at a given interest rate to make them comparable with future returns is known as COMPOUNDING ($FV = PV \times (1 + r)^n$), not discounting.
Because the statements have completely interchanged the definitions of Discounting and Compounding, both Statement (I) and Statement (II) are incorrect.

Years of establishment of the respective banks:

• Punjab National Bank (PNB): Established in May 1894 in Lahore (commenced operations in 1895), founded by Dyal Singh Majithia and Lala Lajpat Rai.
• Canara Bank: Founded in July 1906 as 'Canara Hindu Permanent Fund' by Ammembal Subba Rao Pai in Mangalore.
• Central Bank of India: Founded in December 1911 by Sir Sorabji Pochkhanawala as the first wholly Indian-owned and managed commercial bank.
• Industrial Development Bank of India (IDBI): Established in July 1964 under the IDBI Act as an apex development finance institution.
  Ascending order (earliest to latest): PNB (1894) -> Canara Bank (1906) -> Central Bank of India (1911) -> IDBI (1964).

Classification of agricultural loans by duration:

• Short-Term Loans (up to 15-18 months): Crop loans, purchase of seeds, fertilizers, pesticides.
• Medium-Term Loans (15 months to 5 years): Purchase of milch and draught animals (A), light machinery, small implements (C), digging shallow wells, and minor livestock housing.
• Long-Term Loans (5 to 15-20 years): Major capital investments including reclamation of wasteland/saline land (B), construction of permanent farm buildings/godowns (D), purchase of tractors, heavy land levelling, and orchard establishment.

Analysis of the Law of Variable Proportions:

• Statement (I) is CORRECT: As successive units of a variable factor are added to fixed factors, MPP initially increases (increasing marginal returns), reaches a peak at the inflection point, and then decreases, eventually becoming negative. This trajectory imparts the classic inverted-U shape to the MPP curve.
• Statement (II) is INCORRECT: Diminishing returns to a factor (Stage II of production) means that MPP is declining, but as long as MPP is positive ($MPP \gt 0$), Total Physical Product (TPP) continues to INCREASE at a diminishing rate. TPP declines only when MPP becomes negative in Stage III.