Loans of ₹ 10,972 crore given to farmers on mortgage of old pattadar passbooks is a worrying factor for banks as the documents are no longer valid.
The banks extended the loans for agriculture and allied sectors for creation of basic infrastructure, implements and tractors before the government invalidated the old pattadar passbooks and title deeds in 2016 and, in their place, issued computerised new ones after updation of land records. Since the old documents were invalid only for transfer and registration of lands, the banks extended loans worth ₹ 10,972 crore to six lakh farmers in 2017-18.
The State government amended the Pattadar Passbooks Act withdrawing the old pattadar passbooks which purchased operational and legal problems for banks. In this background, the State-level bankers committee addressed a letter to the government saying it faced operational and legal challenges in extending agricultural loans. They sought suitable modification to the amendment to take care of existing mortgages already created in favour of banks. They wanted that the mortgages be valid till their enforcement and realisation of the loan.
New mortgage
The banks also cautioned the government that there was every likelihood of farmers alienating the land on the basis of new passbooks and title deeds despite the existence of mortgage. A suitable amendment be introduced to the Act to make such acts of farmers void. The amendments should also contain mention about nature of documents of title to be deposited for creation of new mortgage.
The bankers committee has separately addressed the government to validate the old passbooks still in their custody till the loans were fully recovered. The same was highlighted at a recent meeting of the committee which was attended by government representatives.
By another letter recently, the committee has asked the government to specify what steps it proposed either to waive or clear the pending loans. If no orders were issued, the banks held the government responsible for clearing the loans.
Dharani website
In this background, the government has already amended the Record of Rights Act mandating the banks to extend loans without mortgage of passbooks and title deeds. Chief Minister K. Chandrasekhar Rao has also asked banks to lend on the basis of content about individual holdings uploaded on Dharani website of government relating to land records. But, the banks have said that they cannot give loans without mortgage of documents though the government has proposed an ambitious credit plan of ₹ 15,569 crore in 2018-19.
Asked for his response, a top official told The Hindu that government had nothing to do with recovery of loans.