Role of Banking sector in Agriculture

Role of Banking sector in Agriculture

A.P. Karanjalkar, D.H. Rathod

Department of Agricultural Economics, CSMSS College of Agriculture, Kanchanwadi, Chhatrapati Sambhajinagar.

Corresponding Author:

A. P. Karanjalkar

E-mail: ashukaranjalkar@gmail.com

Abstract

The agricultural sector is a cornerstone of economic development, particularly in agrarian economies, where it contributes significantly to employment, food, security, and rural livelihoods. The banking sector plays a crucial role in facilitating agricultural growth by providing necessary financial support in the form of credit,savings,insurance,and investment.Acess to institutional finance enables farmers to to invest in modern technologies, improve productivity, and manage risks associated with climate variability and market fluctuations. Commercial banks, cooperative banks, and regional rural bank (RRBs) are key institutions in the delivery of agricultural credit. Over the years, various policy initiatives and financial innovations-such as priority sector lending, the kisan credit card (KCC) scheme, and the use of digital platforms- have improved the flow of credit to the agricultural sectoe.Howeever challenges such as inadequate access in remote areas, high non-performing assets, and low financial literacy persist. This study explores the multifaceted role of the banking sector in supporting agricultural development and highlights the need for inclusive and resilient financial mechanisms to ensure sustainable agricultural growth.

Keywords: Agricultural finance, rural banking, agricultural credit, crop loans, institutional credit.