The Board of Revenue, Punjab, has recently instructed all District Revenue Officers in the province to record, in the Agriculture Pass Books issued to the farmers, the transactions of loans or leases granted by the leasing companies for tractors and other agricultural equipment.
The directive has resolved the security aspect which was hitherto hindering the leasing companies undertaking their leasing operations related to the farming and cultivation machinery.
Under the existing regulations, the loans allowed by the commercial banks to farmers are entered in the Agricultural Pass Books issued to the farmers, which constitutes a lien on the receivables of the borrowers.
The entry facilitates the recovery of banks' finances when the proceeds of cash crops are realised by the farmers.
When holding the Finance Ministry, Shaukat Aziz had encouraged the leasing companies to provide facilities to farmers for acquisition of tractors and other equipment for accelerating the automation of the sector and improving yields of the agriculturists.
Accordingly, quite a number of leasing companies and modarabas started extending their operations to the smaller towns and catering for the needs of farmers and agro-based activities.
However, a stumbling block was encountered by them when the Revenue Authorities expressed their inability to register lien against the receivables of the farmers as the facility was available only to the commercial banks.
On the request of the Leasing Association and with the active support of Shaukat Aziz (now Prime Minister), Punjab Chief Minister Pervez Ilahi took personal interest in the matter. Jahangir Khan Tareen, currently Federal Minister for Industries and Production, played a key role in expediting the necessary process for issuance of the directive.
With the latest instructions, issued by Punjab Board of Revenue, the leasing companies would henceforth be treated at par with the commercial banks for marking their lien against the receivables of the farmers for recovering of the lease dues.
The Leasing Association has expressed appreciation and gratitude to the government for facilitating the process, which would enable the leasing companies to increase their participation for the growth and modernisation of the farming sector.
When contacted, Basheer Chaudhry, Chairman, Leasing Association, said that the directive had been circulated to all members and that a meeting of the Association, to be held next week, would focus on the practicalities of enhancing the scope of leasing facilities for the agriculture sector. He said that the Association was now persuading other provinces to get similar directives issued.
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