Kisan Credit Card
Kisan Credit Card (KCC) is a big relief scheme for farmers, through which they can easily take loan for farming at low interest. But when farmers are unable to repay their loans on time due to financial problems, the biggest question that arises in their minds is this. Can the bank auction their land? There are many misconceptions regarding this issue. Let us tell you about the rules related to KCC loan default.
Kisan Credit Card (KCC) scheme was started in 1998 with the objective of saving the farmers from the clutches of moneylenders and providing them banking facilities at affordable rates. Under this scheme, farmers can take loan as per their need and meet the expenses like farming, seeds, fertilizers and irrigation. This is a flexible credit system, in which there is no need to apply again and again.
Up to how much loan is available?
Generally, under KCC, loans ranging from Rs 50 thousand to Rs 3 lakh are available, which can also increase according to the land and needs of the farmer. If the farmer repays the loan on time, he gets interest subsidy, due to which the effective interest rate remains around 4%. But when the farmer is unable to repay the loan, the bank does not take immediate strict action. First of all the bank sends reminders and notices. If payment is not made for 90 days, the account is declared NPA. After this the bank starts the process of recovery, in which an attempt is made to reach a settlement first.
If a solution is not found even after this, the matter may reach the administration. At the tehsil level it is considered as revenue arrears and the process of recovery begins. Attaching the land and finally auctioning it is the last step in this process. Before the auction, public notice is given to the farmer and he also gets a last chance. The bank recovers its dues from the amount received from the auction and the remaining amount is returned to the farmer.
Relief may be available in these cases
Land auction is not necessary in every case. Farmers can get relief in circumstances like natural disasters like flood or drought, government loan waiver schemes or insurance claims. Leniency is also often shown in the cases of small and marginal farmers. If the farmer feels that the bank has not followed the rules, then he can appeal in the court or DRT. Apart from this, options like loan re-structuring and one time settlement are also available. Therefore, land auction is not the first step of the bank but the last option. The best solution is to communicate with the bank at the right time.
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