Priority sector challenge for banks: Agri and education loans in stress

Both education and agriculture lending are components of priority sector lending

Meeting priority sector targets could be challenging for banks this year, as at least two sectors—agriculture and education—are showing signs of stress.

Education and agriculture loans are components of priority sector lending. Notably, banks are increasing restructuring both the categories of loans. According to data from Reserve Bank of India (RBI), released on October 10, education loans outstanding showed a year-on-year decline of 3.5 per cent. As on August 18, they stood at Rs 59,300 crore, against Rs 61,500 crore a year ago. Growth in agricultural loans has been muted as well, though banks are compelled to extend such loans