Legal Question in Banking Law in India
hello sir,
my name is vikram pal
sir I want to know about collateral security
Can we use agricultural land as collateral security ?
How much value of the property that we can use to take loan?
My father agricultural land government value is near about 1.3 crore rupees , But the bank said that you can take Education loan only 10% of your property .
2 Answers from Attorneys
18.10.2014
Dear Vikram,
Yes, agricultural land can be provided as collateral security for a loan. The extent of loan varies from bank to bank as also from a scheduled bank, a private bank and a co-operative bank. I suggest you check with two or three banks so as to determine which bank gives you the maximum loan against the collateral security of your agricultural land.
Regards,
The banks generally don't take agricultural lands as securities ,as in default position of a/c it's difficult to recover the amount by auctioning agricultural land as lot of laws of agricultural land reform laws are attracted. Secondly for educational loan if the banker do not insists collateral securities. Prashant sir rightly advised you to try another 2,3 banks.
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