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Procedure For Loan Application, Recovery - 3
Procedure For Loan Application, Recovery - 3
Procedure For Loan Application, Recovery - 3
APPLICATION
STEPS IN PROCESSING LOAN APPLICATION
• Loan application with passport size photo duly signed by the applicant
• Title deeds
– Certified extracts from village register of holdings
– Certified extracts from village register to show possession of land
• Farm map (topo sketch)
• No objection certificate from co-operatives and other branches of commercial banks
• Non encumbrance certificate from the borrower regarding non mortgage of land
elsewhere
• Proforma Invoice (when loan is meant for purchase of pumpset, power tiller tractor,
implements or other ag. Machinery)
• Estimate of the work, when the loan is meant for sinking or deepening of a well,
construction of a shed etc
• Affidavit from the farmer that he has not mortgaged the land elsewhere and that he will
not do so in future
• Ration card/Voter’s Identity card /or any other proof of Identity.
• Stamp papers as per the requirements of the Bank.
• Search report from bank’s advocate (in case of loans above Rs 50,000/- but in some
instances branches call for the same for lower loan amounts also)
3. Scrutiny of records
• The relevant certificates indicating the
ownership of land and extent of land are to be
verified by the bank officials with village
revenue official.
4. Visit to the farmer’s field before sanction
of loan:
• After verifying the records at village level, the
field officer of the bank pays a visit to the farm
to verify the particulars given by the farmer.
• The pre-sanction visit is expected to help the
banker in identifying the farmer and guarantor,
to locate the boundaries of land as per the
map, assess the managerial capacity of the
farmer in farming and allied enterprises and
the farmer’s attitude towards latest technology.
Contd….
• Details on economics of crop and livestock
enterprises, economic feasibilities of proposed
projects and farmer’s loan position with the
non- institutional sources are ascertained in the
pre -sanction visit.
• Hence, the pre-sanction visit of the bank officials
is very important to verify credit-worthiness and
trust-worthiness of the farmer - borrower.
• While appraising different types of loans,
different aspects should be verified.
Contd…
• For advancing loan for well digging, the location of
proposed well, availability of ground water, rainfall,
area to be covered (command area of the well) and
distance from the nearby well etc, are verified in the
pre-sanction visit.
• In the same way, for other loans, the relevant aspects
are verified.
• All these aspects are included in the report submitted
to the branch manager for taking the final decision in
sanctioning of the loan amount.
Pre-sanction visit to the farm
• On receipt of the application, the technical staff- agricultural
officer of the bank should pay visit to the farm to verify the
statements made by the farmer
• Other observations that may be made include
– Enquiry of the proposed guarantors
– Checking the boundaries
– Management capability of farmer with the existing
cultivation
– Adoption of modern technology in agriculture
– Details of economics of cultivation of crop, income from
other sources, feasibility of the proposal, money borrowed
from private sources etc may be enquired
– Physical verification of fixed and current assets of the
farmer
Aspects to be considered by the Ag. Officer for
appraising different types of loans
• Crop production loan:
– Suitability of the soil for the proposed cropping pattern
– Availability of inputs including technical guidance
– Experience of the farmer
– Possibility of linking of credit with marketing
– Sowing and harvesting time for the proposed crops
– Annual family and other expenses for the farmer
– Economics of cultivation of the proposed crops and returns
– Extent of irrigation facilities available
– Sufficiency of water
– Demand and supply of labour
– Liabilities of the farmer to the local co-operative society and other agencies
– The character and financial integrity of the farmer
• Farm Development Loan
• Apart from those aspects from the crop production loan, the
following also need to be considered
– Well sinking and well deepening loan
• Location of the proposed well and its measurements
• Rainfall received in the area
• Water table in the wells situated around the farm
• Recharge capacity of the wells
• Estimate of sinking the well
• Availability of blasting materials
• Capacity of the farmer to execute the work
• Area to be irrigated after completion of the well
• Proposed cropping pattern
• Availability of power and pumpset to lift water on
completion
• Laying of pipelines
– Need for laying pipelines
– Gradation of land
– Availability of material to manufacture pipes or
availability of cement pipes
– HP of the motor to lift and push up water to the
desired height and length
– number of air vent to be constructed
– Area to be benefitted by the plan
– Time of completion etc
• Fencing
– Need for laying fence to the farm
– Loss if any due to the lack of fencing
– Cost of stone materials or cement pillars
– Cost of barbed wire, height and length of the
fence
– Number of rows to be made in the fence
– Long run impact
– Time for completion
5. Criteria for loan eligibility: