Question

Give following steps of processing farm credit in proper sequence from beginning to end.
(A) Disbursement of loan.
(B) Execution of security document.
(C) Personal interview.
(D) Scrutiny of revenue records.
Choose the correct answer from the options given below:

• A. (D), (C), (A), (B).
• B. (D), (B), (A), (C).
• C. (C), (D), (A), (B).
• D. (C), (D), (B), (A).

Hint:

Legal agreements and documentation (Execution of security document) must always be completed before any funds are released (Disbursement).
The interview is always the very first step.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
Processing agricultural credit involves a series of systematic steps designed to verify the borrower's eligibility, assess the feasibility of the project, secure the bank's funds, and ensure proper utilization.

Step 2: Detailed Explanation:
Let us analyze the logical sequence of events in credit processing from the initial meeting to the final payout:
1.

Step 1: Personal interview (C):
The process begins when the farmer meets the bank officer.
The personal interview helps assess the farmer's requirements, farming experience, creditworthiness, and general intent.
2. Scrutiny of revenue records (D):
Once the preliminary request is accepted, the bank verifies the land ownership details, crop patterns, and liabilities by examining land revenue documents (like Jamabandi or 7/12 extract) to determine credit eligibility.
3.

Step 2: Execution of security document (B):
After the loan is sanctioned, the bank draft legal and mortgage agreements.
The borrower executes these security documents, creating a charge on the property or assets in favor of the bank.
4.

Step 3: Disbursement of loan (A):
After the legal formalities and documentation are complete, the loan amount is disbursed to the farmer's account or directly to the input supplier.
Thus, the correct logical sequence is (C) $\rightarrow$ (D) $\rightarrow$ (B) $\rightarrow$ (A).

Step 3: Final Answer:
The correct option is (D).