Tie-up arrangement with Mahindra Gujarat Tractor Ltd. made by Allahabad Bank to boost up farm credit

To boost up flow of farm sector credit, Allahabad Bank has made tie-up arrangements with different Tractor manufacturing Companies for financing their respective brand tractor on all India basis.

As a continuation of the above arrangement, Allahabad Bank has executed a Memorndum Of Understanding (MOU) with Mahindra Gujarat Tractor Ltd.at Kolkata on 20th April 2005for financing their Hindustan brand tractor under a special tractor finance scheme.

The minimum land holding criteria for availing of tractor loan under the scheme has been reduced to 3 acres in case of 35 HP Tractor & 4 acres for above 35 HP Tractor. The Margin Money requirement has also been reduced to 5% of the cost of tractor and its accassories for 35 HP tractor and 10% for above 35 HP tractor to be purchased under the scheme.

Concessional interest rate of 9% p.a. for loans upto 2 lacs and 10% p.a for loans above Rs. 2.00 lacs and upto Rs. 5.00 lacs have been offered for purchase of tractor. Re payment period has been allowed 9 years as per normal tractor financing scheme. The Company/Dealer will extend cash discount of Rs. 6000/- in the cost of Tractor.They will also allow discount on spares, enhanced warranty and labour free services upto a certain extent as per provision of the scheme. All these relaxations/concessions are expected to create overwhelming response of the farmers having small land holdings to avail of loans for the purchase of tractors.

On the occasion of execution of MOU with the Mahindra Gujarat Tractor Ltd., Shri S.K.Goel, Executive Director of the Bank said tie-up arrangements with the various tractor Companies will be instrumental in boosting up the credit flow in the rural areas for farm mechanisation which is prerequisite for increasing cropping intensity to maximise crop production.

Shri S.K.Katiyar, General Manager, Priority Sector Credit added that our Bank has always been taking initiatives to extend credit to the farmers in a hassle free manner to strengthen our country's agricultural economy.

Shri P. Banerjee, CEO of the Company expressed that the special tractor scheme will be very popular amongst the farmers. Their dealers will mobilise loan applications of eligible and intending farmers as per the bank's norms Shri R.M. Mahadevan, General Manager-Marketing of the Company opined that the Company's wide dealers network and Allahabad Bank's well distributed rural branches throughout the country would create synergies in accelerating flow of credit for farm mechanisation.