Dear CCIs
for considering an agricultural loan as an NPA we should first detect whether it is a short term loan or a long term crop loan and i was informed that the crop terms depends from state to state. How will we auditors get to know whether such an agricultural loan is short term or long term.
it is depend upon the seasonal cultivation or yeild of paddy or food grains etc
Refer "RBI / 2007-2008/ 330 RPCD.No.PLFS.BC.72 /05.04.02/2007-08 of May 23, 2008
3. Definitions
3.1. ‘Direct Agricultural Loans’ means Short Term Production Loans and Investment Loans provided
directly to farmers for agricultural purposes. This would also include such loans provided directly to
groups of individual farmers (for example Self Help Groups and Joint Liability Groups), provided banks
maintain disaggregated data of the loan extended to each farmer belonging to that group.
3.2. ‘Short Term Production Loan’ means a loan given in connection with the raising of crops which is to
be repaid within 18 months. It will include working capital loan, not exceeding Rs. 1 lakh, for traditional
and non-traditional plantations and horticulture.
CA. Mukesh Saran
Lucknow
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
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