Andhra Bank earmarks Rs 3,100 cr for agricultural advances

Andhra Bank has earmarked Rs 3,100 crore for agricultural advances for the financial year 2004-05. The bank has signed a memorandum of understanding (MoU) with Mahindra Tractors to provide discounts on tractors financed by the bank.

Addressing a press conference, T S Narayanaswami, chairman and managing director of Andhra Bank, said, "As part of the MoU, Mahindra Tractors would provide a discount of Rs 3,000 on each tractor financed by the Andhra Bank."

The bank during the financial year 2004-05 has set a target of 4,000 units, which is approximately 26 per cent of the market share.

"Under this agreement we hope to finance a minimum of 500 tractors during 2004-05," Narayanaswami said.

The current density of tractors in the state is 8.57 per thousand hectares and is expected to rise to 12 per thousand hectares by 2006.

Under the MoU farmers owning three acres of double cropped land or six acres of single cropped land are eligible for the loan. The MoU would enable the farmers to purchase a Mahindra tractor with a minimum of 15 per cent down payment as compared to 25 per cent they used to pay earlier.

The rate of interest has also been reduced to 10.25 per cent for loans up to Rs 5 lakh which was earlier 12.5 per cent.

The bank also plans to recruit fresh agricultural graduates in the state to strength their agricultural finance portfolio.