## Special Categories of Advances
### A. Agricultural Advances Affected by Natural Calamities
When natural calamities affect agricultural borrowers, banks may provide the following relief:
1. Conversion of short-term production loan into a term loan.
2. Re-schedulement of the repayment period.
3. Fresh sanctioning of a term loan.
> NPA Classification Rule: After relief, the account is classified as NPA as per the rescheduled terms (i.e., the clock resets to the new repayment schedule).
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### B. Consortium Advances
Definition: A consortium advance is where two or more banks jointly advance a loan to a single borrower.
Example: Raju takes a loan of ₹10,000 from: SBI – ₹5,000 | SIDFC – ₹3,000 | ICICI – ₹2,000.
Key Rules:
- The bank with the highest share leads the consortium.
- The Lead Bank is responsible for computing Drawing Power and allocating shares to other member banks.
- Other member banks will treat their share of the advance as NPA if they are not receiving their share of repayments.
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### C. Advances to Staff
| Type of Staff Loan | Accounting Treatment |
|---|---|
| Interest-bearing staff advances (staff as borrower, bank as lender) | Included in the Advance Portfolio of the bank |
| Non-interest bearing / concessional loans (e.g., car loan, home loan at concessional rate, interest-free loan) | Shown as 'Others' under Schedule of Other Assets |
NPA Applicability for Staff Advances:
- Where the bank deducts EMI from salary, the probability of NPA is very low.
- If an arrangement exists where principal is paid before interest, interest is not to be considered overdue from that quarter.