Nagarkurnool drought: banks told to restructure Rs 1,778 crore farm loans
By Rohit SharmaMarkets Analyst, Peepals Business
Representative image: Tama66 / Pixabay
Nagarkurnool's Collector on 3 November 2026 told banks to restructure Rs 1,778 crore of farm loans, with a 12-month moratorium in 10 drought-hit mandals.
What Happened
Banks in Telangana's Nagarkurnool district have been told to restructure agricultural loans worth more than Rs 1,778 crore for farmers hit by drought. District Collector Hemanta Keshav Patil issued the direction at a special District Consultative Committee (DCC) meeting of bankers and officials on Tuesday, 3 November 2026. Eligible farmers in 10 severely drought-affected mandals will get a 12-month moratorium, a break in which they do not have to repay, and the repayment period will be extended to up to 60 months. The meeting followed the declaration of drought in 13 mandals of the district.
Key Facts
- Where: Nagarkurnool district, Telangana; drought declared in 13 mandals, 10 of them severely affected.
- Who directed: District Collector Hemanta Keshav Patil, at a special DCC meeting on 3 November 2026.
- Total loans to be restructured: more than Rs 1,778 crore.
- Crop loans: Rs 1,125.10 crore taken by 65,893 farmers.
- Agricultural term loans: Rs 653.41 crore taken by 27,297 farmers.
- Relief terms: a 12-month moratorium and repayment spread over up to 60 months for eligible farmers in the severely hit mandals.
- How: banks are to convert eligible short-term crop loans, including interest due, into medium-term loans, and give fresh crop and working-capital loans on time for the next season.
- Severely affected mandals named in reports: Urkonda, Veldanda, Vangur, Charagonda, Amrabad, Padara, Balmoor, Lingala, Peddakothapally and Kodair.
Why It Matters
A crop loan is a short-term loan a farmer takes to pay for seeds, fertiliser and labour, to be repaid after the harvest. When the rains fail and there is no harvest, the farmer cannot repay on time. If nothing is done, the loan becomes overdue, and the farmer can find it hard to get a new loan for the next season. Restructuring breaks that chain: the old short-term loan becomes a medium-term loan, repayments start after a year, and the farmer stays eligible for fresh bank credit.
The scale is large for one district. More than 93,000 loan accounts are covered across crop and term loans, and the amount runs to nearly Rs 1,800 crore. For banks, restructuring keeps these loans from turning bad immediately, though the money is only deferred, not written off. For farmers, the real test will be how quickly branches act and whether fresh loans for the next season are sanctioned on time, which the Collector has specifically asked for.
The decision is also a model of how drought relief works at the district level. Once a state declares drought in specific mandals, the District Consultative Committee, which brings together banks and the district administration, can arrange restructuring for borrowers in the declared areas. That is why the list of declared mandals matters: only farmers in those areas qualify for the full relief.
For farmers in the 10 severely hit mandals, the practical step is to approach their bank branch to have eligible crop loans converted, and to apply for new crop loans for the next season.
Peepals calculation: the two parts add up to the total (1,125.10 + 653.41 = 1,778.51 crore). Crop loans make up about 63% of the amount (1,125.10 / 1,778.51). The average crop loan works out to about Rs 1.71 lakh per farmer (1,125.10 crore / 65,893), and the average term loan to about Rs 2.39 lakh (653.41 crore / 27,297). Together, 93,190 farmer loan accounts are covered. Our calculation from the reported figures.
| Loan type | Farmers | Amount (Rs crore) |
|---|---|---|
| Crop loans | 65,893 | 1,125.10 |
| Agricultural term loans | 27,297 | 653.41 |
| Total | 93,190 | 1,778.51 |
Impact
Short-term: eligible farmers in the 10 severely hit mandals will not have to repay for 12 months and can stay eligible for new crop loans.
Long-term: spreading repayment over up to 60 months eases pressure on households after a failed season, though the loans remain on their books.
Who is affected: farmers holding about 93,000 crop and term loan accounts in Nagarkurnool, the banks that lent to them, and the district's rural economy, which depends on the next season's crop.
Key Takeaway
Nagarkurnool district has ordered banks to restructure more than Rs 1,778 crore of farm loans for drought-hit farmers, with a 12-month moratorium and up to 60 months to repay in the worst-hit mandals.
Questions and Answers
Which farmers get loan relief in Nagarkurnool?
Eligible farmers in the 10 severely drought-affected mandals of Nagarkurnool district, out of 13 mandals where drought was declared, get a 12-month moratorium and up to 60 months to repay, according to the Collector's direction.
How much farm debt will be restructured?
More than Rs 1,778 crore: Rs 1,125.10 crore of crop loans taken by 65,893 farmers and Rs 653.41 crore of term loans taken by 27,297 farmers.
Is this a loan waiver?
No. The loans are converted into medium-term loans with a moratorium and a longer repayment period; the money still has to be repaid.
Can farmers get new loans for the next season?
The Collector directed banks to sanction fresh crop and working-capital loans on time for the next season.
Disclaimer: Prepared by the Peepals newsroom from publicly available sources with AI assistance. Information is accurate to the best of our knowledge at the time of publication and may change. Images may be representative. Not professional advice. Report an error via our contact page.
By Rohit Sharma, Markets AnalystCovers Markets Watch and more for Peepals Business. All stories by Rohit Sharma
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Rohit Sharma is a pen name of the Peepals Global Editorial Team, which researches, fact-checks and publishes every story. The portrait is an illustration.
