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.