Banks roll out relief package for farmers in 101 drought-hit Karnataka taluks

Banks in Karnataka have agreed to extend a relief package to borrowers in 101 taluks declared drought-affected by the State government, following a special meeting of the State Level Bankers' Committee (SLBC).

The declaration covers 89 severely affected taluks and 12 moderately affected taluks spread across 24 districts. The SLBC, an inter-institutional forum set up by the Reserve Bank of India under the Lead Bank Scheme to coordinate between the banking sector and the State government, met to work out relief measures for affected borrowers, most of them farmers.

The package, agreed in principle for eligible borrowers in agriculture and allied activities in line with RBI guidelines, includes a 12-month moratorium on loan repayments. The repayment period will be extended up to 36 months in moderately affected taluks and up to 60 months in severely affected taluks.

Coverage will extend to Kisan Credit Card loans as well as investment credit and borrowers in dairy, fisheries, sericulture and other allied activities. Eligible farmers will also be offered fresh need-based credit to help them continue agricultural operations and livelihood activities.

Addressing the meeting, Uma Mahadevan, Additional Chief Secretary and Development Commissioner, said the aim was to ensure that drought-affected farmers receive timely financial support and are protected from distress during the current agricultural season. She said the State government and the banking sector must work in close coordination so that every eligible farmer benefits from the restructuring package and fresh credit support, and stressed a humanitarian approach, directing banks to take a sympathetic view of affected borrowers during the drought period.

Banks have been advised to invoke the relief measures by October 11, 2026, and complete implementation by January 6, 2027.

Shreenath Joshi, convener of SLBC Karnataka, said banks across the State were committed to implementing the package in a transparent, timely and farmer-friendly manner. He said the objective was not merely to defer repayments but also to ensure a continued flow of institutional credit so that farmers can sustain agricultural and allied activities despite the drought.

The meeting was also attended by Kaya Tripathi, Regional Director of the RBI in Bengaluru, Vishal R, Secretary, Fiscal Reforms, Finance Department, along with NABARD and other senior State government officials and member banks.

Led by Canara Bank in Karnataka, the SLBC reviews banking developments in the State, implements government-sponsored welfare programmes, manages priority sector lending such as agriculture and housing, and works to expand financial literacy and rural branch networks. Its institutional members include all commercial banks, regional rural banks and major cooperative banks operating in Karnataka, besides government departments, the RBI and NABARD.