Financing Of Tractors & Power Tiller

Target Group: Any farmer, Agricultural labourers, Self-Help Groups (SHGs), Joint Liability Groups (JLGs).

Eligibility Criteria:

  1. Minimum Utilisation
    • Tractor: Minimum utilization of 1000 hours of productive work per year in case of Tractor
    • Power Tiller: In case of Power Tiller a minimum utilization of 600 hours of productive works per annum
  2. Own Use: At least, 50% must be utilized on own land and remaining for other operations including custom hiring. Generally, for a Tractor 600 hours for ‘Farm Use’ and 400 hours for Other Operations are envisaged.
  3. Land Holding: A farmer having 8 acres of irrigated own farm land can be given for purchasing a Tractor. Minimum irrigated landholding for a Power Tiller is 5 acres.

Economic Life of a Tractor: Economic life of a Tractor would be 10 years or 10000 hours [1000 hrs per Yr c 10 Yrs).

Horse Power (HP):

  • Normally, tractors would be 25 HP to 35 HP. It may be 50 HP in special case.
  • Minimum HP for Power Tiller is 7 HP.

Loan Amount: No Minimum or Maximum limit of land amount. However, loan amount will depend on the actual cost of tractors / power tiller and implements as per the invoices/quotations.

Margin: Minimum 15%

Moratorium Period: Maximum 1 year

Repayment Period:

  • Half yearly/yearly installment depending on income generation of the scheme.
  • Maximum repayment period shall be 9 years for Tractors and 7 years for Power Tillers with gestation period of 1 year.

Rate of Interest: Rate of interest is applicable as per prevailing rate and subject to change from time to time.

Periodicity for Application of Interest: Generally Bank will charge interest at annual rests. The bank will compound the interest only if the loan/installment becomes overdue.

Security

  • For loan up to Rs. 1,00,000/ : Hypothecation of assets created out of Bank loan. Tractor/Power Tiller must be registered with the transport authority and Bank's charges should be recorded with the authority.
  • For loan above Rs. 1,00,000/- : In addition to Hypothecation of assets, other collateral security in the form of LIEN on deposits/mortgage of land & building, third party guarantee etc.

Processing fee: Not applicable

Pre-payment Charges: Not applicable.