Crop loans should be restructured or rescheduled under RBI guidelines depending on the severity of drought: Reports
HYDERABAD: The state government has asked banks to restructure and reschedule crop loans of farmers in 365 drought-affected mandals across Telangana and ensure fresh credit for the ensuing Rabi season. It asked banks to explore measures to ease the interest burden on farmers hit by the El Nino-induced drought.
A special session on ‘Drought Relief Measures for Kharif 2026’ of the State Level Bankers’ Committee (SLBC) was held at Praja Bhavan on Tuesday, which was attended by deputy chief minister Mallu Bhatti Vikramarka, agriculture minister Tummala Nageshwar Rao and senior officials.
Crop loans should be restructured or rescheduled under RBI guidelines depending on the severity of drought, with repayment periods extended by three or five years wherever applicable, the government said.
Drought has been declared in 365 mandals across 31 districts, including 111 severely affected mandals. The government said poor rainfall and the absence of expected floods in the Krishna and Godavari rivers had sharply reduced reservoir levels, with several reaching dead storage. Poor groundwater recharge has also resulted in shortages in an estimated 10 lakh to 15 lakh borewells.
With the Rabi season approaching, banks were asked to immediately disburse the targeted ₹38,268 crore in crop loans. Concern was expressed that only 53 per cent of the overall ₹96,943 crore agricultural credit target had been achieved up to September. Against the ₹1,329 crore target for monsoon farming, only 17 per cent had been disbursed.
Banks were urged to promote low-water crops such as pulses, oilseeds and horticulture and increase lending for drip and sprinkler irrigation. Commercial banks were asked to give greater priority to agricultural lending, including loans for micro-irrigation equipment.
The government also sought increased credit for oil palm, dairy, poultry, livestock and beekeeping to provide alternative incomes to farmers. Banks were asked to strengthen lending to FPOs and women’s self-help groups. Increasing lending by up to ₹2 lakh per SHG, wherever eligible, could improve rural liquidity, the government said. The SLBC was also directed to monitor education loans and address delays in their sanction.
