Raising agriculture lending targets aggressively in modern many years has led to overleveraging. Deterioration in credit history society on the back again of farm loan waivers and diversion of resources (as pointed out by the RBI’s report on agriculture credit history previous September)is also a rising cause for worry.
The March quarter final results of PSBs recommend that all of this has led to a sharp increase in delinquencies in agri loans. For instance, Central Bank of India has observed its agri NPA ratio spike to 14.7 per cent in FY20, from nine.7 per cent in FY19. Bank of Maharashtra’s agri NPA stood at almost 26 per cent of its agri loans in FY20, up from 19.3 per cent in FY19. Union Bank, which had agri NPAs at just 6 per cent of loans in FY18, noted eleven.8 per cent NPA ratio in FY20.
SBI, the country’s largest loan provider,