1. In order to encourage Banks/ DFIs to enhance
financing for development loans in crop and
non crop sectors, the maximum repayment tenure
of development loans has been increased from
5 years to 10 years in revised Prudential
Regulations (PRs) for Agriculture Financing.
However, banks may decide the actual tenure
of a product, duly approved by the Board of
Directors (BOD), based on the nature of financed
product, useful life of machinery/tool and
repayment capacity of the borrowers.
2. Accordingly, necessary
amendments in “Loans for Farm Development
and Machinery/ Equipment”, Regulation
R-13 (Tenure, Classification and Provisioning)
and Regulation R-15 (Tenure) of Prudential
Regulations for Agriculture Financing have
3. The above amendments are
applicable to all Banks/DFIs with immediate
effect. Banks/DFIs are advised to ensure dissemination
of these regulations among their branches/field
4. All other instructions on the subject
shall remain unchanged.
Please acknowledge receipt.
Prudential Regulations for Agriculture Financing