Andhra Bank, Eicher Tractors Tie Up For Easy Finance Plan

Hyderabad, March 25 | Updated: Mar 26 2004, 05:30am hrs
Andhra Bank, as part of its retail focus, has entered into an agreement with Eicher Tractors to finance the customers at a competitive interest rates. According to the MoU signed here on Thursday, the bank has set a target to offer loans to 500 prospective customers having an exposure of Rs 20 crore in the first year of operation. The loans will be offered under the Eicher Kisan Bandu scheme.

Addressing a press conference, R Balakrishnan, executive director, Andhra Bank, said: The bank will continue its focus more on the retail side, which hold huge potential in the areas like housing, infrastructure and power.

We would like to have more such tie-ups in the retail sector, particularly in the automobile segment where the return on investment is much faster with good margins, he said further.

The bank, under Eicher Kisan Bandhu, has set a Rs 20 crore loan target (funding nearly 500 Eicher tractors) in the first year of lending. Quoting Nabards figure, Mr Balakrishnan said that the potential of the farm mechanisation has been estimated at Rs 670 crore and it will go up further.

According to Mr A Ramasubramanian, chief executive, Eicher Tractors, with this new tie-up, Eicher is expected to increase its volume by 500 tractors more. The company now markets about 900 tractors in the state. The industry, which had witnessed a difficult first half, has recovered and seen a sharp growth in sales. The industry is expected to register sales of 1,90,000 tractors during the current fiscal as against last fiscals 1,72,000 tractors, thanks to the good monsoon and banks and institutional support, Mr Ramasubramanian said.

Under the Eicher Kisan Bandhu scheme, the company offers 2500 hours warranty on 30 HP and above tractors, 12 labour free services and Rs 5,000 discount on invoice price.

Andhra Bank has pegged the interest at 10.25 per cent for amount up to Rs 2 lakh and 10.75 per cent for above Rs 2 lakh. This is the most competitive rate as compared to the nominal rate of 12 and above per cent, Mr Balakrishnan said.