Andhra Bank, TVS Motor tie up for 2-wheeler finance

Andhra Bank and TVS Motor Company on Tuesday launched 'TVS Chakra', a scheme for enabling easy finance for two-wheelers across Andhra Pradesh. The scheme offers a wide range of options to both retail and institutional two-wheeler customers.

This is the second such tie-up after Bajaj Auto that Andhra Bank has entered for financing two-wheelers. According to T S Narayanasami, chairman and managing director of Andhra Bank, the bank has already financed around 9,000 vehicles in three months.

"The bank has set itself a target of financing around 25,000 vehicles during the current financial year out of which we expect to finance around 8,000 vehicles of TVS till March 31, 2005," Narayanasami said.

"The demand for two-wheelers in the country has gone up. According to estimates for the quarter ended March 31, 2004, eight companies in this sector have registered a 19 per cent growth with a rise in net profit by around 20 per cent and that is why the bank is partnering with two-wheeler companies to give customers value-added services," Narayanasami said.

He also said that those financed under the tie-up will be covered under the life insurance scheme 'Jeevan Abhaya' of the bank and the premium for the first year would be borne by TVS.

To avail a loan under this scheme the gross annual income should not be less that Rs 60,000 for retail customers. The quantum of the loan is 90 per cent of the on-road price or Rs 60,000 (which ever is lower) and the loan period is 12 to 60 months.

The interest rate under the scheme is 9.75 per cent diminishing for a period up to 36 months and 10 per cent diminishing for a period more than 36 months.

For institutional customers the quantum of the loan is 100 per cent or Rs 60,000 with an interest rate of 9.25 per cent diminishing for a period up to 36 months and 10 per cent diminishing for a period more than 36 months and the period of the loan is 12 to 60 months.