Farm NPAs Stay High Amid Loan-Saturation Concerns

Bad loans in the agriculture sector remain elevated, with several public-sector banks (PSBs) reporting higher slippages in the April-June quarter of FY26.

- MANOJIT SAHA & ANUPREKSHA JAIN

For many banks, non-performing assets (NPAs) in farm lending were 5 per cent or more, with some nearing double digits.

The stress reflects growing concern over loan saturation, with some PSBs reporting lower single-digit year-on-year (Y-o-Y) growth.

"As agri loans are mandatory for priority-sector lending requirements, there is a tendency to lend more, especially to small and marginal farmers, who often failed to repay," says a Bank of Maharashtra official. "This has overheated the segment. Further, writeoffs in agri loans are usually difficult."