Land record digitisation: Report state of implementation, Centre tells banks

“States including Karnataka, Rajasthan, Kerala UP, Gujarat, Madhya Pradesh, Andhra Pradesh and Telangana have fully digitised their land record, enabling banks to create online bank charge on land records. This helps in better credit delivery. But several states, and districts in some states such as Maharashtra, are yet to fully implement this. We are in discussions with banks to effectively implement this for ensuring smooth flow of credit to the farmers,” a government official said.

In a circular to banks in January, the Finance Ministry had asked lenders to finalised “modalities for entry of loan/charges against parcel of land to facilitate linking land record databases with banks and financial institutions.”

A senior banker with a public sector bank said that the government held discussions with the lenders in August where it was emphasised that the remaining districts should also be notified for the purpose of online charge on land parcels for sanction of loans.

In districts which have not yet been notified for creation of mortgage charge by the banks, farmers have to approach lenders in districts where this facility is available, leading to delays in sanctions and disbursements of credit.

“Apart from helping in credit growth in agriculture and MSME sectors, land record digitisation and online creation of bank charge also helps in reducing instances of frauds,” the banker said.

In the Union Budget 2021-22, the government has raised the target for agricultural credit to Rs 16.5 lakh crore, from Rs 15 lakh crore in 2020-21, with greater focus on lending to animal husbandry, dairy and fisheries. In the year 2019-20, against the total agriculture credit disbursement target of Rs 13.50 lakh crore, actual disbursement was Rs 13.93 lakh crore, according to data from the Finance Ministry.

As per Reserve Bank of India guidelines on priority sector lending, banks have to extend 40 per cent of ANBC (adjusted net nank credit) for total priority sector advances. The priority sector advances comprise 18 per cent of ANBC for agriculture sector and 8 per cent is kept for the small and marginal farmers.

To boost credit flow to the farm sector, the government provides interest subvention reducing the rate for short term crop loans up to Rs 3 lakh to 7 per cent. For farmers who repay on time, an additional incentive of 3 per cent is given, reducing their rate of interest to 4 per cent.