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Outstanding Food Credit Crosses ₹1.20 Lakh Crore Despite Slight Fortnightly Dip
RBI Data Highlights Growing Financial Burden of Public Food Procurement
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Open in new tab Pooja Srivastava | Anytime News Network
New Delhi, July 31, 2026: Fresh data released by the Reserve Bank of India (RBI) has brought renewed attention to the mounting financial exposure of India’s banking system towards public food procurement, with outstanding food credit remaining above the ₹1.20 lakh crore mark. While the latest figures show a marginal decline from the previous fortnight, the overall trend reflects a sharp year-on-year increase, raising concerns about the sustainability of food financing and its long-term implications for banking liquidity.
According to the RBI’s Scheduled Banks’ Statement of Position, outstanding food credit extended by Scheduled Commercial Banks stood at ₹1,20,730.44 crore as of July 15, 2026, compared with ₹1,32,049.25 crore on June 30, 2026. However, the figure is more than double the ₹58,992.85 crore recorded during the corresponding period last year, highlighting the substantial expansion in bank financing for government food procurement operations.
The RBI clarified that food credit primarily includes advances extended to public procurement agencies such as the Food Corporation of India (FCI) and various State Government procurement bodies responsible for maintaining India’s food security network. These advances form a crucial component of agricultural procurement but also represent significant deployment of banking resources toward government-backed operations.
Financial experts believe that although food procurement remains essential for maintaining buffer stocks and supporting farmers, sustained dependence on bank credit may create additional pressure on liquidity management and capital allocation within the banking sector. The sharp rise over the past year also indicates increasing financing requirements for procurement agencies amid evolving food security commitments.
The RBI’s latest statement further notes that Scheduled Co-operative Banks maintained food credit exposure of ₹52,074 crore, taking the combined food financing ecosystem to considerably higher levels across the banking sector.
As India continues balancing food security, farmer support and fiscal prudence, the latest RBI figures underline the growing role of banks in financing public procurement. Policymakers and banking experts are expected to closely monitor whether this elevated credit exposure remains temporary or signals a structural shift in government financing patterns.
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