Above-normal rains forecast to boost agri loan demand

EXPECTATION OF AN above-normal monsoon this year is not just a piece of good news for farmers, it has also boosted the sentiment in the banking sector.

- SACHIN KUMAR

With the India Meteorological Department forecasting an above-normal monsoon, banks are expecting a rise in demand for agricultural loans. Analysts are expecting around 25% increase in banks' agri loan portfolios.

"We expect an increase in demand for agriculture loans. With the advent of good monsoon, demand is likely to be higher for working capital requirements for crop production activities, loans for buying farm equipment and term loans and working capital for allied agriculture activities," said Bank of Baroda. The demand is expected to be higher for loans for creation of agriculture storage and financing for food and agro-processing, added the bank.