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Weak monsoon may push farm loan NPAs to Rs 2 lakh crore by FY28

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Weak monsoon may push farm loan NPAs to Rs 2 lakh crore by FY28

Weak monsoon may push farm loan NPAs to Rs 2 lakh crore by FY28

The monsoon shortfall could add 70 to 80 basis points to the agriculture GNPA ratio by March 2028, with public sector banks (PSBs) likely to bear most of the increase. Including farm loans restructured in drought-hit areas that remain classified as standard assets, stressed agriculture advances could reach 6% to 6.3% of the sector’s loan book

Weak monsoon could add 70 to 80 basis points to the ratio, with public sector banks bearing most of the stress. Agriculture GNPAs could reach Rs 1.9 lakh crore to Rs 2 lakh crore by March 2028, with most stress emerging in FY28. About 68% of SCB agriculture credit is concentrated in states that received rainfall at least 20% below normal. A poor rabi harvest and larger state loan waivers could push the GNPA ratio to 6.1% to 6.4%, while a good harvest and wider restructuring could limit it to 4.7% to 4.9%.

11% in June 2026, as the deficient 2026 monsoon pushes some crop loans into default. 41 lakh crore in June 2026, with most of the stress expected to emerge in FY28. The monsoon shortfall could add 70 to 80 basis points to the agriculture GNPA ratio by March 2028, with public sector banks (PSBs) likely to bear most of the increase. 3% of the sector’s loan book, according to CareEdge Ratings.



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