Telangana Government requests banks to provide loan relief for drought-hit farmers

The Telangana government on Tuesday requested banks to restructure and reschedule existing crop loans to reduce the financial burden on farmers affected by the rainfall deficit caused by El Nino in the state. According to a report by Hindustan Times, this demand has been made in view of the difficulties arising in the state's agricultural sector.

Addressing the State Level Bankers Committee (SLBC) meeting on drought relief measures for Kharif 2026, Mallu Bhatti Vikramarka, in-charge of the finance portfolio and Deputy Chief Minister of the state, appealed to banks to provide new credit assistance to farmers so they can undertake the upcoming Rabi cultivation. He stated that possibilities for restructuring eligible agricultural loans should be explored under the applicable guidelines of the Reserve Bank of India (RBI), and interest rate relief should be provided wherever possible.

Vikramarka emphasised that "a failed monsoon should not become a failure in the relationship between the farmer and his bank." He stressed the need for banks to stand by the farming community during this time of crisis. The Deputy Chief Minister informed that the government has declared 365 mandals across 31 districts as drought-hit, of which 111 mandals have been severely affected.

He added that the lack of rain has damaged agricultural prospects, putting heavy pressure on groundwater resources, power supply, state finances, and the farmers' ability to repay loans. As evidence of the efforts farmers made to save their crops even in adverse conditions, he cited the all-time high power demand of 20,018 MW recorded on October 16.

Vikramarka said that farmers had held onto their savings and borrowed money in expectation of a normal harvest, but with the failure of the monsoon, they are struggling to repay loans. With the Rabi season approaching, banks should not limit themselves to rescheduling old loans but should provide new credit to eligible farmers in a timely and necessary manner. He remarked, "The agricultural calendar does not wait for the financial calendar."

The Deputy Chief Minister instructed district-level officials to coordinate with banks and organise special outreach programmes in drought-hit mandals so that farmers can receive the benefits of loan restructuring and other relief measures without delay. Furthermore, he spoke of providing institutional credit, marketing arrangements, and proper guidance on risks to encourage farmers to shift towards low-water crops.

State Agriculture Minister Tummala Nageshwar Rao stated that due to the lack of significant flow in the Krishna and Godavari rivers this year, there has been a major decrease in the storage levels of reservoirs. He added that approximately 10 lakh to 15 lakh borewells have dried up, further exacerbating the crisis in the agricultural sector. Tummala requested banks to meet the crop loan target of ₹38,268 crore for the Rabi season.

Apart from agriculture, Vikramarka asked banks to support the 'Rajiv Yuva Vikas' scheme starting from November 19, which aims to help unemployed youth achieve self-employment. Additionally, he suggested providing an additional loan of at least ₹2 lakh per group to women self-help groups to increase liquidity in rural areas and revive the drought-affected rural economy.