Tractor Scheme

Traditional modes of cultivation viz Bullocks, Camels, Horses etc. can no longer keep pace with the demands of present times due to manifold increase in the population. Power in the form of modern technology is, therefore, the need of the time. To meet this emergent requirement, mybank Ltd. , has modified its existing Tractor Scheme and renamed it as
"Khushali -e- Kissan Agricultural Tractor Scheme" to bring power to the fields.

Purpose of Finance : Purchase of new Tractor.  

Amount of Finance : The Amount of finance will be 80% of the purchase price of the Tractor provided that the amount of finance is collaterally secured equal to 80% of land value as per PIU or 50% of land value as per Market Price or 50% of value of the urban property.

Mode of Finance : The mode of finance under this scheme shall be the leasing of the assets, i.e. Tractor.

Limit of Finance : Maximum exposure per party will be Rs. 0.500 M (under one scheme or in aggregate of all schemes /purposes)
 
Margin :
 20% on land values as per PIU or 50% of last three years average of Market Value of urban property or  40% cash equity if collateral is not available.

Rate of Rental Income / Mark-up :
12% per annum (Revisable).
 In case of default in repayment of installment or mark-up, additional mark-up @ 5 Paisa per thousand per  day shall be charged from the date of default, if the due amount is not cleared within one month from the date it  become due for payment.
 
Arrangement fee at a flat rate of 1% will be charged.

Eligibility :

 a) The Farmer must be resident and self cultivator of the land. No absentee landlord shall be entertained.
 b) The Farmer having unencumbered irrigated agricultural land holding of minimum 5 acres and      maximum 50 acres situated within 50 KM radius from the branch of the bank Relaxation in minimum      land holding limit of 5 acres may be allowed subject to raising / enhancing equity by the farmer to      cover the finance.
 c) The land value as per PIU offered, as security should be equivalent to 20% more than the finance      amount or the assessed market value of offered agri land or urban property should be  equivalent to      2 times the amount of finance applied.
 d) Minimum equity participation should be 20% of the cost of Tractor to be acquired and contributed by      the applicant. The debt equity ratio will be 80:20.
 e) The Farmer should not be a defaulter of any financial institution.


Security : 
   Primary :
           Title of goods - Primary security leased asset i.e. Tractor financed under the scheme, which shall be purchased in the name of the bank.

   Collateral :          
           1) Bank charges on the agricultural land shall be created through Zari Pass Book.
           2) Two personal guarantees of reputed farmers of the area.
           3) Equitable / Registered Mortgage of urban property or cash / paper security.
           4) Comprehensive insurance of Assets. i.e. Tractor.
           3) Insurance Coverage of Agricultural Finance is compulsory. Therefore, the borrower will be                persuaded on merit to avail the multifarious benefits of life insurance and crop insurance                arrangements.

Period of Repayment : 
 10 equal bi-annual installments i.e. principal + accrued mark-up will be due on June 30 and December 31 every year.