According to the income recognition policy, when can interest on advances against Term Deposits, NSCs, KVPs, and life insurance policies be taken to the income account?

Solution

According to the income recognition policy, interest on advances against Term Deposits, National Savings Certificates (NSCs), Kisan Vikas Patras (KVPs), and life insurance policies can be taken to the income account on the due date, provided adequate margin is available in the accounts. This means that the borrower should maintain a sufficient margin or collateral to cover the advances, ensuring a certain level of security for the bank. Without adequate margin, the interest cannot be recognized as income.