[sbinews] SBI Eases Norms On Tractor Financing (Financial Express)

  • From: "Rajendra S. Pai" <rs.pai@xxxxxxxxx>
  • To: <sbinews@xxxxxxxxxxxxx>
  • Date: Wed, 10 Mar 2004 08:52:51 +0530

SBI Eases Norms On Tractor Financing
 (Financial Express)

MUMBAI, MARCH 9:  State Bank of India (SBI) has eased the terms and
conditions to step up agricultural loans to expand its priority sector

The bank is now ready to finance tractors for the farmers who even have four
acre of land. Earlier the collateral requirement for the bank was around 40

The bank plans to end the fiscal with priority sector lendings of Rs
3,500-4,000 crore, almost 40 per cent of the total lending portfolio.

Particularly getting aggressive on tractor financing, the bank which has
already tied up with four companies has plans to tie up with six more
tractor manufacturers to cover 95 per cent of the market.

The bank on Tuesday signed a tractor-financing arrangement with Same
Deutz-Fahr India, a 100 per cent owned subsidiary of Italy-based Same
Deutz-Fahr Group.

SBI chief general manager C Sundarashyam, said the non-performing assets
were high as such farm loans ran for several years and there were instances
of natural calamities.

In terms of tractors, the NPAs were at 18-19 per cent. However, things were
seen to be improving in the farm sector.

"Till end January, the priority sector lendings stood at Rs 1,900 crore, of
which Rs 1,300 crore was on agricultural front," said SBI deputy general
manager ES Balasubramanian.

The bank already has tractor financing tie-ups with four companies,
including Mahindra & Mahindra, and expects to end the year 2003-04 with
disbursements of Rs 500 crore.

"The loan disbursements are expected to touch Rs 1,500 crore in FY05," he

SBI, the country's largest bank, is in discussion with six other companies,
including international tractors, Eicher and New Holland.

The bank has three different schemes - 'Tractor Plus', 'Krishi Plus' and
'Rakshak Tractor Plus catering to different sections. Same Deutz-Fahr India
managing director Kamal Bali said that SBI would provide 90 per cent of the
loan amount at 10.25 per cent for loans above Rs two lakh and 9.75 per cent
for loans up to Rs 2 lakh with a tenor of 7-9 years for financing a tractor
costing between Rs 3-4.50 lakh.

The scheme called 'SBI-Same Tractor Finance would enable farmers to take a
discount of up to Rs 5,000 per tractor and free accessories worth Rs 3,000
to Rs 5,000 depending upon the range of tractors, he said.

Under the arrangement, farmers would get a three-year warranty. They would
also get a five per cent discount on all spare parts effective from the date
of purchase for five years. The scheme would be marketed through same
dealerships and SBI branches, especially the 6,000 rural and semi-urban

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