The Role of Commercial Banks in Promoting Sustainable Agro-based Industries: A Study of Bihar

Abstract

This research paper explores the pivotal role of commercial banks in fostering sustainable agro-based industries in India, with a specific emphasis on the state of Bihar, where agriculture forms the backbone of the regional economy. Given Bihar’s agricultural dominance and its vast rural workforce, commercial banks have emerged as vital financial intermediaries that facilitate the transition from subsistence farming to value-added agro-industrial production. By providing timely credit, enabling the adoption of modern technology, and promoting entrepreneurship in rural areas, these banks have significantly contributed to agro-industrial growth, productivity enhancement, and long-term sustainability. The study draws upon a robust dataset sourced from the Reserve Bank of India (RBI), the National Bank for Agriculture and Rural Development (NABARD), and Bihar’s state-level economic reports to analyze patterns of credit disbursement and assess their correlation with agro-industrial development. Additionally, the research investigates operational frameworks of commercial banks, their services targeted towards the agro-based sector, and their alignment with government schemes and sustainable development goals (SDGs). By incorporating both quantitative data and qualitative case studies, this paper provides insights into how commercial banking interventions not only stimulate industrial growth but also generate rural employment, improve farmer incomes, and strengthen the agro-industrial value chain in Bihar. The findings underscore the socio-economic impacts of such financial support, highlighting the need for expanding credit outreach, addressing institutional bottlenecks, and promoting sustainable financing models. This study ultimately positions commercial banks as critical drivers of inclusive rural industrialization and sustainable economic transformation in Bihar and beyond.