KCC Norms in Agriculture Loan with Example:
KCC NPA rules are complex in technical terms. Even bankers are not so clear about the conditions when a KCC i.e crop loan becomes NPA. So, let us understand the KCC- Crop loan. How KCC loans covert to NPA? What is the time duration for KCC to be declared as NPA?
|Treated As NPA If||Short Duration Crop||Long Duration Crop|
|The Installation of principal or Interest thereon remains overdue||Overdue for TWO crop Seasons||Overdue for ONE crop Season|
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
Showing NPA dates for different crops after adopting the RBI Guidelines
Restructured Accounts· The restructured substandard account would be eligible to be upgraded to the standard category only after one year after the date when the first payment of interest or of principal, whichever is earlier fails due subject to satisfactory performance during the period.
In case where after restructuring the performance is not as per revised repayment schedule for one year, then the account will be downgraded/classified as per original repayment schedule.
If the account has become NPA on 1st April 2020 & has been rescheduled with fresh repayment starting from 1st April 2021, then the said account should perform satisfactorily up to 31st March 2022 then only it will be upgraded. However, if it fails to perform, it will be treated as if it is NPA from 1st April 2020.