Hello,
You may just once visit the senior branch manager and see if it works. But usually bank will not give loan on agricultural land.
You may still give it a try.
Regards
Agriculture land mortgage to bank
Dear Sir, I have a land of 1 acre in the city and it's registered under the Agriculture Land . Now i want to take the loan for business purpose but bank is forcing me to get it convert into the commercial. MVR for Agriculture Land -1.5L/ Decimal MVR for Commercial Land - 7.0L/Decimal In Bihar the conversion rate is 10% of the MVR . Pls. advice me to whether I can contact senior officials of the Bank or it can't help. Regards, Raj
Asked 7 years ago in Property Law
Religion: Hindu
5 Answers
Hi, converting in to commercial will lead to a better market value of your land .. That is why bank official are asking to do so .. You can try and talk to higher officials if they can pass the loan without requiring conversion
Bank is insisting that land be converted into commercial as band would not be able to take recovery proceedings under SARFESI fior agricultural land in case of default in payment of loan
2) you cannot be forced to convert agricultural land into commercial land
1. For providing loan, Bank keeps original title deed of the land for creating mortgage on it to secure its loan.
2. In case the borrower fails to repay the loan it becomes Non Performing Asset for which the Bank initiates SARFAESI proceeding to take physical possession of the mortgaged property for selling the same to recover the outstanding loan amount.
3. As per law, SARFAESI Action can not be initiated on agricultural land as mortgaged property.
2. Bank is asking you to convert the agricultural land to commercial land to ensure that SARFAESI Action can be initiated against your mortgaged property for taking its physical possession for selling the same to recover the outstanding loan amount.
3. There is no point approaching any Senior Official of the said Bank since as per SARFAESI Act, Bank can not take possession of and sell agricultural land as mortgaged property for which they will not mortgage agricultural land.
Generally the loan based on agriculture land shall be granted for agricultural purposes only, hence the bank is right in its demand asking you to get your property converted to NA, also because the will not be eligible to invoke recovery laws for recovery of defaulted loan on agricultural property.
You may approach the higher office for considering your request but cannot force them.
