The intending borrower is advised to visit the nearest MCB Branch for information. This will enable him to discuss his / her requirements and have first-hand information on every aspect of the process through face to face interaction with Agriculture Marketing Officer (AMO), Credit Officer or Branch Manager.
Bank shall consider only those credit proposals for financing which qualify. However, as a general rule, bank will always obtain adequate security / collateral, in accordance with sound and prudent banking practice, detailed as under.
- Bank's charge on agricultural land through Zarai Pass Book
- Against mortgage of rural or urban property
- Lien on deposits, cash collaterals such as Defense Savings Certificates (DSCs), Special Saving Certificates (SSCs), RICs and other liquid assets subject to restriction as laid down by SBP.
- Against registration of tractor in name of customer while same is hypothecated in favor of the Bank and comprehensive insurance with the bank's mortgage clause collaterally secured against bank charge on agricultural land/rural/urban property or any collateral coverage acceptable to the bank.
- Joint registration of marine fishing boats (registration authority-Marine Mercantile Department) with comprehensive insurance for financing to marine fisheries with the bank's mortgage clause collaterally secured against bank charge on agricultural land/rural/urban property or any collateral coverage acceptable to the bank.
- In case of Limited companies, charge on Current assets of the company shall be obtained.
- Corporate Guarantee
- Charge on Secured Transaction Registry to be ensured as per procedure/applicable.
- Against Trust Receipts in case of tube well/thresher/combined harvester/farm machinery, farm equipment, etc., with insurance coverage against fire, theft or any other risk specified in approval of finance with the bank's mortgage clause collaterally secured against bank charge on agricultural land/rural/urban property or any collateral coverage acceptable to the bank.
- In case of non-availability of Pass Book or other acceptable securities, finance against two credit worthy guarantees/sureties of third parties can also be availed by the tenant farmer maximum up to Rs 1000,000/- per farmer per year. However, the total guarantee of one guarantor in all banks shall not in any case exceed Rs 1000,000/-. The surety giving the guarantee must not be a defaulter. Surety must not give guarantee of more than two persons. Practice of extending clean Agriculture loans may be discouraged as far as possible.
- Security also means/such as hypothecation of movable agricultural machinery, pledge
- hypothecation of agriculture produce on the farm or in godown, and charge on livestock on the farm. In case of pledge/hypothecation of agriculture produce lying in godown, the title/ownership of the produce in the name of the borrower shall be determined based on appropriate documents, for example Electronic Warehouse Receipt (EWR) as defined under Collateral Management Companies Regulations 2019 issued by the SECP.
- Any other security acceptable to the bank or as prescribed by SBP.
Valuation of Properties
The property offered as security outside the Pass Book will be valued by bank’s approved evaluators. Branch Manager / officer personally visits the Agriculture land / property before accepting the same as security. The Market Value / FSV (Forced sale value) of agriculture land or rural/urban property shall also be assessed by Branch Manager / AMM / AMO as independent inquiries to ensure that market price is realistic and not exaggerated.
Market value of Agriculture land may be accepted (calculated by revenue department) taking three years average “Baiy” of same locality.