Maharashtra Chief Minister Devendra Fadnavis on Monday warned banks against demanding that farmers submit their credit scores to get agricultural loans, reported The Indian Express.

“If credit is not provided to farmers, it has repercussions on the economy and it leads to farmers’ suicides,” the chief minister said at the 167th State Level Bankers’ Committee meeting, according The Hindu.

Noting that the state government had previously registered first information reports against banks asking farmers for their credit scores, Fadnavis asked those attending the meeting to urgently find a solution to the problem.

The chief minister had in June warned nationalised banks that FIRs would be registered against them if they insisted on credit scores for farm loans.

This came against the backdrop of several farmers being denied loans, despite being eligible, according to The Indian Express.

On Monday, Fadnavis highlighted that the Reserve Bank of India had issued guidelines regarding farm loans and said that agriculture should be treated as a business, not just as a supportive sector. The chief minister called on banks to increase credit to farmers, particularly with a favourable monsoon forecast.

“The state does not face [a] drought situation this year,” the chief minister was quoted as saying by The Hindu. “The crop production will be good. All the nationalised banks should pay attention towards increasing credit to the farmers. Agriculture is an important part of the State’s economy. It cannot be ignored.”

To be eligible for farm loans, farmers are required to own or lease agricultural land for a minimum period set by the bank. While land is typically used as collateral, this requirement is usually waived for loans up to Rs 2 lakh.

In cases where farmers do not own land, banks prefer group lending. If a farmer defaults, banks may restructure loans, offer one-time settlements, or pursue recovery via debt recovery tribunals or lok adalats.

Loans become non-performing assets if they remain unpaid for over 90 days. For short-term crop loans, defaulting for two crop seasons makes it a non-performing asset, while for long-term crops, one season of default is enough to qualify it as an NPA.