North India Statesman
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Kisan Credit Card (KCC) scheme is a huge support for crores of farmers of the country. For seeds, fertiliser, irrigation or other expenses related to farming, money is available at lower interest rate, due to which one does not have to make rounds of moneylenders. But the question arises that what will happen if due to some compulsion a farmer is not able to repay the loan on time? Can the bank really auction off his hard-earned money and his land?
The direct answer is – Yes, the bank can do this. But don’t worry, this is not the first step, but the last step. Even for a bank, auction is a long and cumbersome process. Therefore, every farmer should know what happens and what are your legal rights before reaching this stage.
First understand, what is Kisan Credit Card?
This scheme was started in 1998 so that farmers could avoid the trap of heavy interest from moneylenders and could directly connect with banks and take loans at low interest. With this card, a farmer can easily get a loan ranging from ₹ 50,000 to ₹ 3 lakh. If a farmer repays his loan on time, he also gets a huge discount of 2% to 3% on the interest (i.e. the interest of 7% becomes only 4%).
When a farmer is unable to repay the loan…
If you are not able to pay the installment on time, the bank does not talk about immediate auction. The process proceeds like this:
- remind: The bank reminds you several times by calling and sending notices.
- Declaring NPA: If no installment is paid for 90 consecutive days (about 3 months), the bank considers your account as a ‘bad loan’ (called NPA).
- Recovery proceedings: After this the bank starts the recovery process. This involves negotiations, sending legal notices and finally taking possession of the land.
When and how is land auctioned?
If no solution is found even after notice and talks, then the matter reaches the Tehsildar or the district administration. The administration tries to recover this debt by treating it as “government dues”. If the matter still does not work out, then the route of auctioning the land is adopted.
for this SARFAESI Act, 2002 (SARFAESI Act) There is a very strict law under which the bank does not even need to ask the court to sell the mortgaged land.
Auction Process:
- The bank publishes the date and information of the auction in the newspaper.
- The farmer is given one last chance to repay the loan.
- If the money is not received, the land is auctioned on the scheduled date.
- The bank recovers its loan from the money received from the auction and if any money is left, it is returned to the farmer.
Most importantly: How can you survive the auction?
Don’t lose courage, you also have many ways. The biggest mistake that farmers make is to remain silent and not talk to the bank.
Chat: If you feel that you will not be able to pay the installment, then go to the bank yourself and talk to the manager. Tell them your problem. The bank may extend your installments (this is called loan restructuring) or may also offer a One-Time Settlement, in which you may get some discount on the principal amount.
Your land cannot be auctioned in the following situations:
In certain circumstances, the bank cannot auction your land, even if you have not repaid the loan:
- If your crop is affected by flood, drought or any other natural disaster I am ruined.
- If the government loan waiver Or any relief package has been announced.
- If you are a small or marginal farmer and you have less than 5 acres There is land.
- If your loan crop insurance scheme Was covered and have not received the insurance money yet.
Your last weapon: the law
If you feel that the bank is not following the rules, you Debt Recovery Tribunal (DRT) Or you can appeal in the court. The auction can also be stopped temporarily by taking a stay order from the court.
biggest lesson
Remember, land auction is the last weapon of the bank, not the first. If you are unable to repay the loan, do not remain silent in fear. Maintain communication with the bank. Timely communication and correct information can be the biggest help in saving your land.
