The Presidents/CEOs
All Banks/Specialized Banks/DFIs

Dear Sir /Madam,

Amendment 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

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 been made.
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 offices.
4. All other instructions on the subject shall remain unchanged.

Please acknowledge receipt.