HDFC seeks nod for lending against farmland in Punjab

08 March 2008

Mumbai: Housing Development and Finance Corporation (HDFC), which rejected calls for a reduction in lending rates, has now sought state government's sanction for accepting agricultural property as security for home loans to rural people in Punjab.

HDFC said it has written to Punjab government for allowing it to take agriculture property for mortgage purposes in a bid to advance money to rural people of the state.

"Unlike banks, we are not allowed to mortgage agricultural property under the Agriculture Act in Punjab for advancing loans to rural people for purchasing rural assets,'' HDFC, joint managing director Renu Sud Karnad said.

"If we are allowed to keep the property as security for advance then we will be able to disburse loans to rural people,'' she said.

HDFC, she said, has targeted to disburse Rs200 crore in housing loans to rural people of the state.

The potential for rural lending is quite high as over 70 per cent of population in India resides in rural areas, she said, adding that the corporation would have to devise a mechanism to ascertain income of rural people for advancing loan to them.