Farm Loan NPAs Remain High Across PSBs

Bad loans in the agriculture sector continue to worry public sector banks (PSBs), with several reporting farm NPAs above 5% — and some nearing or crossing 10% — in Q1 FY26. Despite mandatory lending to the farm sector under priority-sector norms, banks face stress due to loan oversaturation, especially among small and marginal farmers. Some banks showed only low single-digit YoY growth in farm lending.

, Punjab & Sind Bank Lead in Stress Levels Uco Bank recorded the highest farm NPA ratio at 10.81%, though down from 12.43% last year. Punjab & Sind Bank also posted a worrying 9.54%, while Union Bank and Bank of Maharashtra reported 8.13% and 9.65%, respectively. Farm NPAs Account for 9.65% of Loans at BoM’s agri NPAs rose from ₹2,512 crore to ₹3,166 crore, despite only 3% YoY loan growth. This highlights intensifying stress even with slower disbursements. Wider Industry Data Confirms Agri Pressure RBI data shows agriculture had the highest sectoral NPA ratio at 6.2% (as of Sep 2024). The share of agri NPAs in total PSB NPAs climbed to 57.3% by March 2024, up from 51.1% a year earlier.