Grant of financial assistance by financial institutions

(1) For the purpose of availing of any financial assistance by an agriculturist on the security of any land, production of Kisan Pass Book issued in respect thereof shall be treated, by the financial institutions granting financial assistance, as a valid document to prove his title or interest in such property. However, production of Kisan Pass Book shall not be insisted by the co-operative societies for advancing crop loans. (2) A financial institution granting any financial assistance to the holder of the Kisan pass Book shall in record in the Kisan Pass Book the factum of such financial assistance and the report of sanctioning of loan and where such financial assistance has been given on the security of any holding, the financial institution shall also make an entry against the holding on the security of which the financial assistance has been granted by it, and the entry so made shall have the effect of creating a charge in favour of the financial institution on the holding against which the entry has been made and the holder of Kisan Pass Book shall be debarred from alienating the said holding until the outstanding amount of the financial assistance granted by the financial institution has been repaid together with interest due thereon: Provided that if any charge on any land or interest therein was created by an agriculturist in favour of a financial institution before the commencement of this Act, it shall not debar him from creating, after such commencement, a subsequent charge on such land or interest therein in favour of a financial institution as security for any financial assistance given to him by such financial institution: Provided further that the financial institution which sanctions the first loan after the issue of the Kisan Pass Book shall ascertain and verify, within fifteen days, all outstanding loans, except crop loan advanced by co-operative societies and encumbrances created by the agriculturists, as the case may be, by procuring an affidavit to that effect and shall enter and authenticate the details thereof in the Kisan Pass Book. (3) The financial institution shall endorse a copy of the relevant entries incorporated in the Kisan Pass Book to the Revenue Officer as well as the Sub-Registrar within the local limits of whose jurisdiction the whole or any part of the property which has been so charged is situate and on receipt of the same the Revenue Officer and the Sub Registrar shall cause necessary entry to be made in the record of rights, respectively, maintained in their offices.