Purpose – The loan is offered for the purchase of tractor and other agricultural machinery
Eligibility – Tractor – minimum land holding 4 acres of perennial irrigated land; Minimum of 1000 hrs of production work in agriculture per year on own farm or both own farm & custom services.
Power Tiller – minimum land holding 4 acres of perennial irrigated land; Minimum of 600 hrs of production work in agriculture per year on own farm or both own farm & custom services.
Security – Hypothecation of Tractor and other implements & accessories; Guarantee from one or two persons of good means acceptable to bank; Simple / Equitable mortgage of land to the extent of usually 100% of valuation of loan advance.
Insurance – Comprehensive insurance coverage should be assigned in Bank’s favour & assignment should be with the insurance company.
Margin – 15% of the investment cost by the way of down payment.
Rate of Interest – Up to Rs. 50,000 – 10%; Up to Rs.2 Lakhs – 10.50%; Up to Rs.5 Lakhs – 11.50%; Above Rs.5 Lakhs – 11.50%
Sanctioning Authority– Regional Manager
Disbursement – Payment to the supplier directly against a letter of authority from the borrower
Repayment Schedule – For Tractor – 9 Years (maximum) after moratorium of 8 months
For Power Tiller – 7 Years (maximum) after moratorium of 12 months