| Date: |
19-09-2002
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| Notification No: |
RBI Notification No 25/2002
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| Issuing Authority: |
RBI
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| Type: |
Notification
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| File No: |
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| Subject: |
Charging of Interest at Monthly Rests – Agricultural Advances
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Charging of Interest at Monthly Rests � Agricultural Advances
DBOD
No. Dir. BC. 25- 13.03.00- dated 19th September 2002
We
invite a reference to para. 3 of our circular DBOD No. Dir. BC. 8/13.03.00/
02-03 dated 26 July 2002 wherein banks have been advised that instructions
regarding charging of interest on monthly rests shall not be applicable to
agricultural advances and banks shall continue to follow the existing practice
of charging/ compounding of interest on agricultural advances linked to crop
seasons. As regards other agricultural advances in respect of short duration
crops and allied agricultural activities such as dairy, fishery, piggery,
poultry, bee keeping, etc., banks have been advised to take into consideration
due dates fixed on the basis of fluidity with borrowers and harvesting/
marketing season while charging interest and compounding the same if the loan/
installment becomes overdue.
2.
In this connection, it has come to our notice that the banks are not
following the above instructions in respect of agricultural advances. We,
therefore, advise banks to meticulously follow the instructions regarding
charging of interest on agricultural advances contained in above circular.
3.
Please acknowledge receipt.
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