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DBOD.No. BP.BC.17/21.04.048/98 March 4, 1998 Phalguna 13, 1919 (Saka)
(excluding Regional Rural
Bank) Dear Sir, Prudential norms on Income
Recognition, Asset Classification and Provisioning - Agricultural Advances Please refer to our circular
DBOD No. BP.BC. 14/21.04.048/97 dated February 19, 1997 advising banks that
in respect of advances granted for agricultural purposes where
interest/instalment is in arrears for more than two quarters from the date
the interest/instalments are due for repayment, the advance should be treated
as NPA. We have been receiving representations that keeping in view the
agricultural practices and the time taken for harvesting and marketing of
crops, it is difficult to uniformly apply the above norm for classification
of advances granted for various agricultural purposes. The matter has been
reconsidered and it is clarified that advances granted for agricultural
purposes may be treated as NPA if interest and/or instalment of principal
remains unpaid, after it has become past due, for two harvest seasons but for
a period not exceeding two half years. 2. These instructions will
apply from the accounting year 1997-98. Yours faithfully, (A. Ghosh) Chief General Manager |