My KCC is for under one lakh but the manager wants me to mortgage land. Is this rule or just harassment?
Bank is asking for collateral on my KCC, is that allowed for small amounts?
RRavi Verma5mo ago · 187 views
5 Answers
🌾Farmer.in Krishi TeamExpert ✓4mo ago
For KCC and crop loans up to a notified ceiling, banks are required to lend without any collateral or third-party guarantee. The Reserve Bank has fixed a collateral-free limit for agriculture loans, and there is a higher collateral-free ceiling for loans to farmers tied up with assured marketing such as through an FPO. Below that limit the bank can take only a hypothecation of the crop or assets created from the loan, not a mortgage of your land. If the amount is small and the branch still insists on land security, you can quietly point to the RBI collateral-free norm and, if needed, escalate to the bank's grievance officer or the lead district manager. The exact collateral-free amount is revised by RBI, so check the current figure before you argue your case.
SSachin Pawar4mo ago
Mere case me manager ne bhi pehle land mortgage manga tha chhoti rakam par. Maine RBI collateral free limit ki baat ki aur lead district manager ko application di, tab loan mila. Likhit me dena zaroori hai, zubani baat se kaam nahi banta.
DDeepak4mo ago
Mere saath bhi aisa hua tha. Maine RBI ki collateral free limit ka hawala diya aur lead bank manager ko likha, uske baad branch ne bina land ke loan de diya.
RRohit Bansal4mo ago
A useful tactic is to ask the manager in writing why collateral is needed below the notified limit and request a written reply. Most branches back off once it is on paper. If they still refuse, the banking ombudsman is the next step. This is general info, check the current RBI limit first.
AAshok Meher4mo ago
In our area the cooperative society was much easier than the commercial bank for a small KCC and did not push for land at all. If your nearest branch keeps stalling, try the district cooperative bank or a regional rural bank, their crop loan process for small amounts is often simpler. Carry your land record and a no due certificate so they cannot delay you on paperwork.