StocksMedium•9 November 2026•
1 min read
Indian Banks' Agricultural NPA Ratio Climbs to 5.1% in Q2 2026
Key Facts
1The gross non-performing asset ratio for agricultural loans in India reached 5.1% in Q2 2026.
2The agricultural NPA ratio significantly exceeds the system-wide gross NPA ratio of 1.8%.
The gross non-performing asset ratio for agricultural loans in India reached 5.1% during the second quarter of 2026. The Economic Times reported that this figure significantly exceeds the system-wide gross NPA ratio of 1.8% recorded during the same period.
The stress in farm credit is attributed to a poor southwest monsoon which ended 12.6% below its long-period average, impacting the repayment capacity of borrowers. According to BMI Research, agricultural loans have emerged as a primary risk to asset quality, particularly for state-owned lenders with high rural exposure, despite the banking sector maintaining overall healthy capital buffers.