RBI revises norms for co-op banks

A loan granted for long duration crops will be treated as NPA, if the installment of principal or interest there on remains unpaid for one crop season beyond the due date.

Earlier, advances granted for direct agricultural purposes are treated as NPA, where interest and/or installment of principal remain unpaid after they become due for two harvest seasons not exceeding two half years.

However, in the case of longer duration crops, the current prescription of not exceeding two half years is inadequate.

The RBI has defined ‘long duration’ crops with crop season longer than one year. The crop season for each crop, which means the period up to harvesting of the crops raised, would be as determined by the state level bankers’ committee in each state, RBI said.

The Reserve Bank of India advised banks to ensure a timely repayment and that should be on the basis of cash flows/ fluidity with the borrowers. This is with a view to improve the record of recovery in agricultural advances.