TVS Motor, Union Bank in tie-up

To provide 'liberalised' two-wheeler loans

TVS Motor and Union Bank of India announced a new 'liberalised' two-wheeler finance scheme for TVS products.

Under the 'Union Miles Scheme', which is available for all the products of TVS Motor company, individual and institutional customers can avail finance at 10-10.5 per cent interest for periods between 48 and 60 months.

As an added attraction, Union Bank will give credit cards for a three-year period along with its ATM card. Addressing a gathering of dealers and customers soon after signing a memorandum R Chandramouli, vice-president (sales and marketing of TVS Motors), and V S R Murthy, general manager of Union Bank, expressed confidence over the success of the scheme.

This exclusive tie-up will be initially extended to Andhra Pradesh, Uttar Pradesh, Bihar and Jharkhand. "The scheme is totally hassle free and is available without any collateral or processing fee," Murthy said.

Speaking on the occasion, Chandramouli said that the customers were expected to gain about Rs 5,000 against a loan of Rs 40,000 through the scheme compared to any other scheme available.

"About 613 TVS two-wheelers were sold through this scheme just in six days time," he said.

The bank will provide loans of three times the net annual salary or 90 per cent of the onroad cost of the vehicle, inclusive of registration fee and life tax, whichever is lower. The loan period is 48 months for retail customers and 60 months for institutional customers.

For institutional customers the bank will levy 10 per cent interest on loans with a tenure of three years and 10.25 per cent for loans with tenures beyond three years. Individual customers will be charged a rate of 10.5 per cent.

TVS Motor Company will educate its dealers about this new scheme and Union Bank on their side will empower branch managers to give spot sanctions of loans. Special marketing officers will be appointed and trained by the bank with support from TVS to implement the scheme.

Retail lending continues to be a thrust area for Union Bank like other major banking institutions. As of March, 2004, advances to this segment are expected to be around Rs 6,200 crore, which is 22 per cent higher than the retail advances of the previous year.

TVS Motor, on the other hand is looking forward to consolidate its position across all two-wheeler segments with this strategic tie-up.