Bank Credit to Agriculture Problems of Recovery and Non-Performing Assets

Abstract

Rural development agencies and Government departments put pressure on banks to sanction loans. These loans suffer from weaknesses like lack of proper planning, lack of requisite manpower to implement schemes properly and monitor the benefits from implementation. The RBI, in line with the international practices and in accordance with the recommendations made by the Committee on the Financial System, has introduced, in a phased manner, prudential norms for income recognition, asset classification and provisioning for the advances portfolio of the banks including agricultural loans so as to move towards greater consistency and transparency in the published accounts.