Public sector banks and rural banks together hold more than 85 percent of the total agricultural debt of India. Their exposure to unsecured loans may be more than 85 percent, said Nomura.
Two-thirds of India’s agricultural debt is concentrated in states where a debt waiver has already been announced or promised, and states that will go to the polls in the next two years, Nomura analysts wrote in a report on Tuesday.
The risk of default on India’s Rs 9.5 lakh crore agricultural debt is rising as debt waivers by two major states triggers demand for similar relief in other states, putting pressure especially on poll-bound states, according to broking firm Nomura.
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