Insights

A carbon credit is only as meaningful as the value it delivers to the farmer. The Carbon Handshake presents an implementation framework for a viable, farmer-centred carbon economy through institutional coordination, credible digital MRV, blended finance, FPO aggregation, transparent benefit-sharing and timely settlement. Ecological safeguards remain essential, but evidence on costs, adoption and performance will emerge only through implementation, learning and responsible sca

A crop loan in Vidarbha is a climate exposure. A dairy unit in Bundelkhand is a climate exposure. A warehouse in coastal Odisha is a climate exposure. We just did not price it that way. The global conversation has moved fast — TCFD, ISSB, green taxonomies, blended finance, transition finance. But the real work is quieter and harder. It is sitting with a credit officer in a rain-fed district and asking: what happens to this portfolio when the monsoon shifts by three weeks? Wha

Priority Sector Lending was created to direct credit toward sectors the market often underserves. In India, it remains one of the most important channels for moving capital into agriculture, rural households, MSMEs, housing, and other priority segments. But the environment around PSL has changed sharply. India’s aggregate outstanding bank credit stood at ₹212.9 lakh crore in March 2026, up ₹29.2 lakh crore year-on-year. At that scale, even small shifts in asset quality can ha

India's fertiliser subsidy bill for 2026-27 is budgeted at ₹1.71 lakh crore — ₹1.17 lakh crore for urea alone, and ₹54,000 crore for nutrient-based support covering phosphates and potash. The revised estimate for 2025-26 had already overshot the budget at ₹1.86 lakh crore, driven by geopolitical supply disruptions from West Asia. CRISIL has projected a further 20–25% surge in FY27 if global shocks persist. This is India's second-largest subsidy expenditure, behind only food.

In February 2024, the Reserve Bank of India released its draft disclosure framework on climate-related financial risks. The framework covers four pillars — governance, strategy, risk management, and metrics and targets — mirroring TCFD and ISSB architecture. A staggered implementation timeline was built in, and the clock has started. As of FY 2025-26, Scheduled Commercial Banks, All India Financial Institutions, and Top and Upper Layer NBFCs are required to begin governance,

The India Meteorological Department issued its first long-range forecast for the 2026 southwest monsoon on April 13. The number was 92% of the Long Period Average — below normal, for the first time in three years. The model error margin is plus or minus 5%, which means there is a 35% probability of rainfall falling below 90% LPA into deficient territory. The historical base rate for that outcome is 16%. The odds have more than doubled. That forecast landed quietly in the fina

Priority Sector Lending targets create both obligations and opportunities. Most institutions treat PSL as a compliance burden. The smarter ones treat it as a portfolio strategy opportunity. Here is what effective PSL optimisation looks like in practice. Know your sub-target gaps early. Agriculture, small and marginal farmers, weaker sections — each has its own sub-target. Most shortfalls are not in overall PSL but in specific sub-targets. Identify your gaps in Q1, not Q4. Yo

Artificial intelligence in rural lending is generating enormous excitement. Satellite imagery, machine learning, alternative data — the possibilities sound transformative. Some of it is real. A lot of it is hype. After working in rural finance for three decades, here is my honest assessment. What is real and working: Alternative data credit scoring is genuinely useful where traditional data is absent. ML models using satellite imagery to verify crop acreage, weather data to a

Farmer Producer Organisations have been around for years. But most lenders still do not know how to lend through them effectively. The result: FPOs remain underleveraged as a credit channel despite being one of the strongest structures available for reaching small farmers. Here is how FPO-mediated credit works at its core. The FPO sits between the lender and individual farmers. Instead of appraising 200 small farmers individually — each with informal income, fragmented land r

After 30 years in rural banking, I have seen many risks come and go. Drought years, NPA cycles, regulatory changes. But nothing compares to what climate change is doing to agricultural lending portfolios — and most institutions are still not taking it seriously enough. Physical risks are already here. Drought, flood, cyclone, heat stress — these are not future projections. They are current realities affecting crop yields and borrower repayment capacity across districts we hav