There is a fresh set of NPAs in agricultural lending by the bank to the tune of Rs 1,300 crore. Hence the bank’s management has decided that branches where NPAs in agriculture are greater than 15 per cent will not be allowed to offer fresh loans to agriculturists. Agricultural loans are part of a bank’s priority sector lending of 40 per cent out of which agriculture is supposed to get 18 per cent of the loan portfolio. The banking sector’s total NPA stood at 10.8 per cent of loans in September 2018. Otherwise, loans drying up with the drying up of land would be an economic disaster where farmers would die and banks shut down from accumulated losses.

Source: The Telegraph May 03, 2019 04:07 UTC