The government has asked the banks for the statute regarding the digitization of land registers and the creation of equitable mortgages online that would contribute to faster disbursement of agricultural loans.
The Ministry of Finance pushed states to digitize land registers and educate all districts with the aim of creating mortgage charges online. While several states have already implemented these measures, the central government is pushing for the online service to direct credit flows to districts that have not yet deployed it.
“States like Karnataka, Rajasthan, Kerala UP, Gujarat, Madhya Pradesh, Andhra Pradesh and Telangana have fully digitalized their land registers, allowing banks to create online bank charges on cadastres. This contributes to better credit delivery. But several states and districts in some states like Maharashtra have yet to fully implement it. We are in talks with the banks to implement this effectively to ensure a smooth flow of credit to farmers, ”a government official said.
In a circular sent to banks in January, the Ministry of Finance asked lenders to finalize “the terms of registration of loans / fees on a plot of land in order to facilitate the linking of land databases with banks and institutions. financial ”.
A senior banker at a public sector bank said the government had discussions with lenders in August, where it was stressed that the remaining districts should also be notified for the purpose of online invoicing on the plots of land. for the sanction of loans.
In districts that have not yet been notified for the creation of mortgage charges by banks, farmers have to turn to lenders in districts where this facility is available, resulting in delays in sanctions and loan disbursements. credit.
“In addition to contributing to the growth of credit in the agriculture and MSME sectors, the digitization of land registers and the creation of online bank fees also help reduce cases of fraud,” the banker said.
In the Union budget 2021-22, the government raised the agricultural credit target to Rs 16.5 lakh crore, from Rs 15 lakh crore in 2020-21, with more emphasis on loans to the ‘breeding, dairy products and fishing. During the year 2019-2020, compared to the total agricultural credit disbursement target of Rs 13.50 lakh crore, the actual disbursement was Rs 13.93 lakh crore, according to data from the Ministry of Finance.
According to the Reserve Bank of India guidelines on lending to priority sectors, banks must grant 40% of the ANBC (adjusted net nank credit) for the total advances in the priority sector. Priority sector advances represent 18 percent of the ANBC for the agricultural sector and 8 percent are reserved for small and marginal farmers.
To increase the flow of credit to the agricultural sector, the government provides an interest subsidy reducing the rate of short-term agricultural loans up to Rs 3 lakh to 7 percent. For farmers who repay on time, an additional 3 percent incentive is given, reducing their interest rate to 4 percent.