Oriental Bank of Commerce (OBC), a public sector bank, has entered into a tie-up with Escorts Ltd, a tractor manufacturer, for providing retail tractor finance to farmers. The bank will also offer credit facilities to authorised dealers of Escorts under a Channel Financing Arrangement.
Mr Allen C.A. Pereira, Executive Director, OBC, and Mr Ashok Chadha, CEO, Agri Machinery Group, Escorts Ltd, signed the two memoranda of understanding — one on retail financing to farmers and the other on channel financing to the authorised dealers. Small farmers too could avail finance from OBC for purchase of Escorts tractors as the minimum land holding eligibility criterion has been slashed to 2.5 acres.
OBC would make available loans to the tune of 90 per cent of the tractor cost at interest rate of 10.75 per cent per annum for loan up to Rs 2 lakh and 11.50 per cent per annum for loans between Rs 2 lakh and Rs 5 lakh. The Channel Financing arrangement provides for structured credit up to 91 days to the dealers at interest rate within a band of 10.5-12 per cent depending on the collateral offered.
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