In view of the deficit monsoon rain, Prime Minister Manmohan Singh has already directed all departments and ministries to coordinate with states to meet any eventuality by monitoring the situation on a weekly basis.
"If the monsoon fail it will (have) a cascading impact on credit growth as well as the economy which in turn will impact the re-paying capacity of borrowers," SBI chairman Pratip Chaudhuri told reporters in Mumbai.
He further said the State Bank of India (SBI) will assess the impact of monsoon after August 10 when the situation will become more clear.
Speaking on the impact of monsoon failure, PNB Chairman and Managing Director K R Kamath said in New Delhi that RBI has clearly defined norms for banks for agricultural credit in drought affected areas.
"If any of the area is affected by drought, there is very clearly defined scheme for restructuring of accounts of that particular area," he said while announcing the first quarter result of the bank.
Kamath does not expect the impact of deficient rains on NPAs related to farm credit to be much as there would re-structuring.
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