Five years after India’s public sector bank mergers, Tripura records strong MSME credit growth but slower agricultural lending expansion. Experts urge balanced banking reforms to ensure farmers receive adequate institutional credit alongside business financing for inclusive rural development and sustainable economic growth.
Five years after the Government of India’s mega public sector bank mergers, Tripura presents a mixed picture of banking reforms. While the consolidation has significantly strengthened lending to Micro, Small and Medium Enterprises (MSMEs), experts believe the pace of agricultural credit expansion has not kept equal momentum, raising concerns about balanced rural development.
According to an analysis of State Level Bankers’ Committee (SLBC), Tripura data for 2019–2025, total agricultural and allied advances increased from Rs. 64,097.60 lakh before the mergers to Rs. 1,06,480 lakh in 2025, an overall rise of Rs. 42,382.83 lakh. However, several merged banks recorded either stagnant or declining agricultural lending. Indian Bank’s agricultural advances slipped from a combined Rs. 252.17 lakh before the merger to Rs. 247.42 lakh in 2025. Punjab National Bank’s agricultural lending declined from Rs. 31,542.41 lakh in 2020 to Rs. 31,211.53 lakh in 2025, while UCO Bank also witnessed a fall from Rs. 7,018.46 lakh to Rs. 5,616.28 lakh during the same period.
In contrast, MSME financing expanded dramatically. Total MSME advances rose from Rs. 1,49,381.40 lakh in 2019 to Rs. 2,81,015.82 lakh in 2025 an increase of Rs. 1,31,634.46 lakh. State Bank of India alone enhanced MSME lending by over Rs. 43,024 lakh, while Punjab National Bank, Union Bank of India, Bank of Baroda and Canara Bank also registered substantial growth.
Kiran Bhowmik, a Ph.D. Scholar in Agricultural Economics at Tripura University, observed that although stronger banks have undoubtedly improved credit delivery to businesses, agriculture the backbone of Tripura’s rural economy requires equal attention. “If commercial lending becomes the primary focus because of higher profitability, small and marginal farmers may gradually find it harder to access institutional credit,” he said.
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The data suggest that the merger policy has strengthened banking efficiency but also highlights the need for a more balanced credit strategy. Experts recommend that regulators closely monitor agricultural lending so that future banking reforms promote both enterprise growth and sustainable rural development. After all, inclusive economic progress depends not only on expanding credit volumes but also on ensuring that farmers and rural communities continue to receive adequate financial support.
