Farmers holding Class 2 land can take loan against it from banks: Minister

Mumbai, Mar 26 (PTI) The Maharashtra revenue department has re-issued an old circular stating that farmers holding Class 2 land can mortgage it to avail loan from banks, a state minister said on Wednesday.

In a statement, Revenue Minister Chandrashekhar Bawankule said, "Farmers owning Class 2 land often faced difficulties in availing loans due to restrictions on mortgaging such lands. The revenue department has now issued a fresh memorandum, allowing banks to accept these lands as mortgage." The decision was made after officials of the Satara District Central Co-operative Bank raised the issue during a meeting on March 11, he said.

"This decision will now come into effect across the state, allowing all farmers holding Class 2 land to mortgage it for loans," Bawankule said.

The minister noted that a similar circular was issued in 1990, and the department has now re-issued it as a reminder to address ongoing concerns.

"District central banks and nationalised banks will now be able to accept Class 2 land as collateral," he said.

Earlier, banks used to hesitate in offering loan against such a land as in case of loan default, they could not enforce the mortgage due to legal limitations on Class 2 land. As a result, many farmers were denied credit, Bawankule said.

The reminder circular has been sent to all divisional commissioners and district collectors to ensure uniform implementation, he added. PTI ND NP

Source: PTI