https://www.taxtmi.com/caselaws?id=200255 Banks could not treat agricultural advances like commercial loans by charging compound interest at half-yearly or quarterly rests. The RBI circulars governing agricultural finance drew a clear distinction between current dues and overdue amounts: interest on current dues in agricultural loans was not to be compounded, while overdue crop-loan instalments could have outstanding interest added to principal. Section 21-A of the Banking Regulation Act, 1949 did not authorise banks to charge interest contrary to those directives; it only prevented reopening of accounts on the ground that interest was excessive or unreasonable. The bank was therefore not justified in levying compound interest on the agricultural loan. en-us Wed, 27 Nov 1985 00:00:00 +0530 Sat, 24 Mar 2018 14:41:29 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=200255 Banks could not treat agricultural advances like commercial loans by charging compound interest at half-yearly or quarterly rests. The RBI circulars governing agricultural finance drew a clear distinction between current dues and overdue amounts: interest on current dues in agricultural loans was not to be compounded, while overdue crop-loan instalments could have outstanding interest added to principal. Section 21-A of the Banking Regulation Act, 1949 did not authorise banks to charge interest contrary to those directives; it only prevented reopening of accounts on the ground that interest was excessive or unreasonable. The bank was therefore not justified in levying compound interest on the agricultural loan. Case-Laws Companies Law Wed, 27 Nov 1985 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=200255