Banks Must Strengthen Telangana Rural Economy, Expand Farm Loans Beyond Crop Credit: Minister Tummala Nageswara Rao

Hyderabad: Telangana Agriculture, Marketing, Cooperation and Handlooms Minister Tummala Nageswara Rao urged banks to play a stronger role in strengthening the rural economy of Telangana and expand agricultural loans beyond crop credit to infrastructure and value-added agriculture sectors.

The minister made these remarks during the 49th State Level Bankers Committee (SLBC) quarterly meeting held at Praja Bhavan.

Representatives of banking institutions, NABARD officials, cooperative banks, commercial banks, and regional rural banks attended the meeting.

Telangana Records Strong Banking Growth

Minister Tummala Nageswara Rao said total deposits in Telangana are expected to reach around Rs.9.43 lakh crore by the end of the 2025-26 financial year, while total advances are projected to touch Rs.12.33 lakh crore.

He stated that the state’s Credit-Deposit ratio has reached 130.78 percent, which is above the national average.

According to the minister:

• Priority sector loans reached Rs.4.09 lakh crore
• Agricultural loans reached Rs.1.87 lakh crore
• Agricultural loan target achievement stood at 102 percent

He described the achievement as commendable.

Crop Loan Distribution Crosses Rs.75,486 Crore

The minister said crop loan distribution during the 2025-26 financial year reached Rs.75,486 crore, achieving 84.34 percent of the annual credit plan target.

He added that loans worth Rs.1,68,401 crore were distributed under agriculture, allied sectors, and infrastructure, achieving 101.88 percent of the target.

According to the minister, banks such as:

• Canara Bank
• Indian Bank
• Bank of Baroda
• Punjab National Bank
• TGCAB

have exceeded loan distribution targets, while some other banks need to improve their performance.

Minister Expresses Concern Over Short-Term Crop Loans

Minister Tummala Nageswara Rao expressed concern that a major portion of agricultural loans is still limited to short-term crop loans.

He said Telangana agriculture is rapidly shifting towards:

• Horticulture
• Oil palm cultivation
• Integrated farming
• Food processing
• Protected cultivation
• Dairy sector
• Fisheries
• Farm mechanization

He urged the banking system to respond according to changing agricultural needs.

The minister suggested providing long-term investment loans for:

• Warehouses
• Cold storages
• Pack houses
• Food processing units
• Drip irrigation
• Solar agriculture
• Agricultural mechanization

Telangana Government Implemented Rs.21,000 Crore Farm Loan Waiver

The minister stated that the Telangana Government implemented a historic farm loan waiver of nearly Rs.21,000 crore in a single phase.

He said this improved bank recoveries and restored rural credit discipline.

According to him, farmers are maintaining repayment discipline and banks should not delay sanctioning investment loans.

He also said:

• Agricultural NPAs reduced from 5.23 percent to 4.71 percent
• Term loan NPAs are only 2.62 percent

The minister described this as proof of farmers’ commitment.

Rising Crop Production Increasing Pressure on Infrastructure

Minister Tummala Nageswara Rao said paddy and maize production in Telangana has increased to record levels during the last two years.

Due to this, pressure has increased on:

• Storage capacity
• Warehouses
• Drying yards
• Transportation
• Logistics
• Scientific post-harvest management systems

He urged banks to expand:

• Warehouse receipt finance
• e-NWR finance
• Post-harvest loans

The minister also requested loans for infrastructure such as:

• Warehouses
• Cold storages
• Silos
• Grading units
• Ripening chambers

through private sector participation.

Huge Opportunities in Horticulture and Oil Palm Sector

The minister said Telangana has huge opportunities in horticulture, oil palm, turmeric, and mango cultivation.

He stated that although horticulture crops are cultivated on only 6 percent of agricultural land in the state, they contribute nearly 25 percent of agricultural gross value.

He added that Telangana imports vegetables worth around Rs.4500 crore every year from other states, creating major opportunities in cold chain, storage, and food processing sectors.

According to the minister:

• Oil palm cultivation expanded to 2.91 lakh acres
• Around 79,000 farmers are cultivating oil palm

Financial Support Needed for Farmer Producer Organisations

Minister Tummala Nageswara Rao said nearly 1,000 Farmer Producer Organisations (FPOs) are operating across Telangana.

He said these organisations require strong financial support from the banking system.

The minister requested working capital support for:

• Input shops
• Storage warehouses
• Custom hiring centres
• Drones
• Bio-input resource centres
• Agricultural processing units

He said this would strengthen rural infrastructure and help transform FPOs into sustainable agricultural development centres.

Telangana Allocates Rs.147.91 Crore for Farm Mechanization

The minister stated that the Telangana Government has allocated Rs.147.91 crore for agricultural mechanization for the 2026-27 financial year.

He said the scheme will be implemented through the Direct Benefit Transfer (DBT) system to ensure direct benefits to farmers.

Banks were asked to provide additional financial assistance to farmers.

Minister Seeks Timely Crop Loans for Tenant Farmers

The minister said tenant farmers cultivate nearly 30 percent of agricultural land and timely crop loans are extremely important for them.

He said this would reduce dependence on high-interest private loans.

Banks were urged to ensure timely loans for purchase of seeds, fertilizers, machinery, and other agricultural inputs.

Focus Future Agricultural Loans on Climate-Friendly Farming

Minister Tummala Nageswara Rao suggested that future agricultural loans should focus on:

• Micro irrigation
• Integrated farming
• Agro forestry
• Solar agriculture
• Protected cultivation
• Climate-resilient farming

He stated that Telangana offers one of the safest rural investment environments in the country due to farmers’ repayment discipline, low NPAs, and strong government support.

The minister called upon all stakeholders to work together to make Telangana a national model in agricultural investments, rural infrastructure, food processing, value-added agriculture, and rural industrial development.

At the 49th SLBC quarterly meeting held at Praja Bhavan in Hyderabad, Minister Tummala Nageswara Rao urged banks to strengthen Telangana’s rural economy by expanding agricultural loans beyond crop credit and supporting infrastructure, food processing, and value-added agriculture. He highlighted the state’s strong banking growth, Rs.21,000 crore farm loan waiver, rising agricultural production, and the need for increased investment in rural infrastructure and climate-friendly farming sectors.

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