Concerns are growing in Tripura over the effectiveness of private banks in implementing Priority Sector Lending (PSL), particularly in agriculture and rural development. Experts and researchers have called for stricter monitoring of agricultural loans, improved credit utilization oversight, and stronger support for public sector banks serving farmers and MSMEs.
While Tripura’s banking sector continues to play a vital role in supporting agriculture, rural development, and small businesses, concerns have been raised regarding the actual implementation of priority sector lending by private sector banks in the state.
According to banking sector observers and researchers, public sector banks have remained at the forefront of implementing government-sponsored schemes aimed at benefiting farmers, entrepreneurs, and economically weaker sections. However, questions are being raised about whether private sector banks are adequately fulfilling their responsibilities under priority sector lending norms.
Kiran Bhowmik, PhD Scholar in the area of Agricultural Economics at the Department of Economics, Tripura University, stated that public sector banks are making sincere efforts to support customers through government-backed initiatives in sectors such as Agriculture, Micro, Small and Medium Enterprises (MSMEs), and other priority areas. He noted that although reports published by the State Level Bankers’ Committee (SLBC) indicate that private banks are contributing significantly to agricultural lending, the situation on the ground often appears different.
“Public sector banks are trying their level best for the benefit of customers through the implementation of government-related schemes in priority sectors. However, practical experience suggests that some private sector banks provide loans under the agriculture category, but the funds are frequently utilized for purposes unrelated to agriculture, such as purchasing vehicles, motorcycles, and other non-farm assets. The reports may present a positive picture, but field-level experiences do not always reflect the same reality,” Bhowmik said.
The observations have sparked a broader discussion on the need for stricter monitoring and evaluation of agricultural credit disbursement. Experts believe that while credit expansion is important, ensuring that loans are utilized for their intended purposes is equally critical for achieving the objectives of rural development and agricultural growth.
At the same time, concerns have also been expressed regarding the capacity of public sector banks to meet the increasing demand for agricultural and rural credit. Banking professionals and researchers argue that additional support from the government may be necessary to strengthen the lending capabilities of public sector institutions, enabling them to serve farmers more effectively.
Meanwhile, cooperative banks have earned appreciation for their continued support to the farming community. Backed by cooperative societies and Primary Agricultural Cooperative Societies (PACS), these institutions have been actively extending financial services to rural households and agricultural producers.
| Also Read: Justice Lodh Calls for Upholding Human Rights in Healthcare |
Experts suggest that a balanced approach involving stronger oversight, improved credit monitoring, and enhanced institutional support could help ensure that all categories of banks contribute more effectively to Tripura’s agricultural and rural development goals.
