Archive · 4 Aug 2025
Agri Loan NPAs Remain High Amid Saturation Concerns
Banks are having trouble with loans given to farmers.
Many farmers aren't paying back their loans, causing these loans to be considered 'bad loans'.
This is happening because some banks might have lent too much money to farmers, and it's hard for the banks to get the money back.
The Reserve Bank of India said this is a big problem, especially in the agriculture sector.
However, some banks like Bank of Baroda are doing better, lending more and having fewer bad loans.
Agriculture sector sees elevated non-performing assets (NPAs) in Q1 FY26.
Several public sector banks (PSBs) reported higher farm loan slippages.
Loan saturation and difficulties in recovering agri loans contribute to the issue.
RBI data indicates agriculture had the highest gross NPA ratio at 6.2% as of September 2024.
Bank of Baroda reported growth in farm loans and reduced NPAs, bucking the trend.
- Who
- Public-sector banks, private banks, and farmers.
- What
- Elevated non-performing assets in the agricultural sector.
- When
- Q1 FY26 and as of September 2024.
- Where
- Not explicitly stated.
- Why
- Due to loan saturation and challenges in recovering farm loans.
Challenges
Opportunities
Performance Trends
Challenges
PSBs facing high NPAs due to farm loan slippages and loan saturation.
Opportunities
Bank of Baroda shows growth in farm lending with reduced NPAs.
- RBI Agriculture NPA Ratio (Sept 2024)
- 6.2%
- Bank of Maharashtra Farm NPAs (June)
- Rs 3,166 crore
- Uco Bank Farm NPA Ratio
- 10.81%
- Bank of Baroda Farm Loan Growth
- 16.2%
- Bank of Baroda NPA Reduction
- From 5.31% to 4.85%
Sources
Federal Bank shares in focus after MFI stress pressures asset quality, increases slippages
The ‘squeezed middle’: Why mid-sized banks are struggling after a tough quarter
Federal Bank share price targets reduced; stock tumbles, what's next?
Federal Bank slides 5%: H3 reasons why brokerages still predict 20% rally despite Q1 shock
Federal Bank share price crashes 6% to 14-week low after Q1 profit decline. Should you buy, sell, or hold?
HDB Financial shares slip below IPO issue price; stock down 17% from recent high
Federal Bank bets on gold loans to drive growth over next three years
Federal Bank shares dive 5% amid MFI stress, Q1 profit dips