The macro level determinants of the institutional credit flow to agriculture occupy a crucial position in an emerging economy like India. The aggregate level of agricultural credit may well be considered as the combined result of macroeconomic policies transmitted through different channels. The main aim of this study is to examine the inter-linkage between the institutional credit to agriculture and the macroeconomic variables. To attain this objective, the study develops a model by considering several theories, focusing only on commercial banks. This study uses vector autoregression procedure to estimate the relationship. The results of the study confirm that there is considerable response of institutional credit to macroeconomic variables and this proves that agriculture sector is not insulated.