Amid concerns of worsening bad agri loans, RBI data showed the agriculture sector’s contribution to the total pool of bad loans has fallen by 30 basis points (bps) to 8.3% in FY17, compared with FY16. This contrasts with a 140-bps rise in the non-priority sector’s share in non-performing assets (NPAs) in the same period. RBI classifies agriculture, micro, small and medium enterprises (SME), export credit, education, housing, social infrastructure and renewable energy as priority sectors. The rest of the loans, including corporate credit is part of non-priority sector lending.
According to the data, public-sector banks which have been at the forefront of agri lending have witnessed a 40 bps decline in the share of agri NPAs to 8.5% of their total loan book in FY17. However, the absolute amount of both agri and non-priority sector NPAs of all banks has swelled over the previous fiscal to Rs 60,200 crore and Rs 7.28 lakh crore, respectively. For foreign banks, agri NPAs constituted only 0.5% of their total bad loans and non-priority NPAs constituted 82.2% in FY17.