Multiple banks. Different interest rates. Call it a "conflict of interest".
Established under the Regional Rural Bank act of 1976, this regional rural bank is a product resulting from the combination of 3 banks prompted by the SBI, the JRGB, JAGB and SBGB. The bank has established its presence in over 11 districts of Gujarat with its head office located in Rajkot. It has envisioned itself to become a leading financial institution for the disadvantaged masses and aims to provide sound financial solutions with a customer centric approach.
Many people belonging to the disadvantaged classes are farmers and the Saurashtra Gramin Bank offers a specialized loan to allow these farmers to purchase tractors for their various uses on the field. The loan is meant to help farmers purchase tractors that will allow them to increase their total production or output. The loan also covers any accessories a tractor might need.
The Saurashtra Gramin Bank tractor loan has a maximum tenure of 9 years and the eligibility criteria that the loan has is that the borrower should have a minimum 6 acre irrigated plot of agricultural land. The loan also does not require a moratorium. The interest rate charged on the tractor loan is 13% p.a. The loan amount does carry additional charges based on the amount disbursed.
For any loan amount up to RS 25,000 the processing charge is RS 100. For loan amounts availed that range from RS 25,001 to RS 1,00,000 the processing charge is RS 500 and for those loan amounts exceeding RS 1,00,000 the processing charge is an amount equivalent to 1.25% of the loan amount disbursed.
The maximum loan amount available is related to the cost of the tractor and these are further broken down into slabs based on horsepower of the tractor
For tractors ranging from 30 to 39 horsepower the maximum loan amount is RS 3.25 lakh, tractors ranging from 40 to 45 horsepower the maximum loan amount is RS 4 lakh, tractors ranging from 45 to 50 horsepower the maximum loan amount is RS 4.70 lakh, tractors ranging from 51 to 55 horsepower the maximum loan amount is RS 5.75 lakh, tractors ranging from 56 to 60 horsepower the maximum loan amount is RS 6.90 lakh and tractors ranging from 61 to 75 horsepower the maximum loan amount is RS 8 lakh
The primary security required for the loan is the hypothecation of the tractor or any other accessories for which the loan was applied. The other collateral required is creation of charge on the agricultural land, post-dated cheques are also accepted and so are third party guarantees that have tangible assets for security.
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