Module: | Capital Adequacy, Basel Norms & Monetary Policy
Q3: Regarding asset classification for agricultural advances, which of the following are correct?
1. NPA classification is linked to "crop seasons" rather than a fixed 90-day period.
2. For short duration crops, an account is NPA if the instalment remains overdue for two crop seasons.
3. For long duration crops, an account is NPA if the instalment remains overdue for one crop season.
4. This crop-season norm applies to all agricultural loans including those for allied activities like poultry.
Which of the statements given above is/are correct?
2. For short duration crops, an account is NPA if the instalment remains overdue for two crop seasons.
3. For long duration crops, an account is NPA if the instalment remains overdue for one crop season.
4. This crop-season norm applies to all agricultural loans including those for allied activities like poultry.
Which of the statements given above is/are correct?
✅ Correct Answer: B
The correct answer is B. Statement 1 is correct: Under RBI guidelines, NPA classification for agricultural advances is uniquely linked to "crop seasons" rather than the standard 90-day delinquency period.
Statement 2 is correct: A loan granted for short duration crops is treated as NPA if the installment remains overdue for two crop seasons.
Statement 3 is correct: A loan for long duration crops is treated as NPA if it remains overdue for one crop season.
Statement 4 is strictly incorrect: The relaxed crop-season norm does not universally apply to all agricultural loans; allied activities like poultry, dairy, and apiary generally follow the standard 90-day overdue norm unless explicitly linked to crop cycles by specific notification.
Statement 2 is correct: A loan granted for short duration crops is treated as NPA if the installment remains overdue for two crop seasons.
Statement 3 is correct: A loan for long duration crops is treated as NPA if it remains overdue for one crop season.
Statement 4 is strictly incorrect: The relaxed crop-season norm does not universally apply to all agricultural loans; allied activities like poultry, dairy, and apiary generally follow the standard 90-day overdue norm unless explicitly linked to crop cycles by specific notification.