Despite the monsoon vagaries, the finance ministry ruled out the need for any waivers in farm loans or interest rate moratorium (an authorized period of delay or waiting).

According to the Indian Meteorological Department, the average rainfall from this year's southwest monsoon is 23 percent below the long-term average. This is the lowest amount of rainfall since 1972, when the overall deficit was 24 percent. In northwest India, which consists of states like Haryana, Punjab, Chandigarh, Uttar Pradesh, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, and Rajasthan, the rainfall deficit is even worse, around 36 percent. The northeastern region, which includes the states of Bihar, West Bengal, Sikkim, and Jharkhand, has recorded a rainfall deficit of 27 percent.

A senior official from the minisry said "We are closely monitoring the scenario. There seems to be no need for a blanket waiver scheme or interest rate moratorium. In most of the states whether it be Haryana, Uttar Pradesh and Punjab, standing crops have survived as farmers were able to use ground water with the state government providing free electricity"

Even banks are not expecting an increase in loan defaults. LNV Rao, general manager, Union bank of India said that though a slight rise in defaults in agri loans cannot be ruled out, the non performing assets (NPAs) would remain within a manageable level and is expected to decline from the current 2.5 percent to 2.2 percent.

The credit offtake that had declined in June with the delay in monsoons has rebounded in the month of September. Officials at various banks like the union bank, the Indian overseas bank confirmed this. The banks are likely to direct 18% of their entire lending to agriculture sector under priority sector lending norms.