The Hindu Business Line : Andhra Bank to focus on two-wheeler loans

ENTHUSED by the response to the two-wheeler loans and the subsequent recovery ratio, Andhra Bank has decided to focus on two-wheeler segments in its auto finance portfolio.

Announcing this on the eve of launching the new motorcycle variant from the Bajaj Auto's stable `Bajaj CT-100' here, the Andhra Bank Chairman and Managing Director, Mr T.S. Narayanasami, said a major portion of its Rs 37-crore auto finance portfolio was contributed by the two-wheeler segment.

He said the bank was the first one in the country to launch a unique scheme called `Kisan Chakra' to empower farmers by financing two-wheelers and for limited transport of inputs and products.

According to Mr Narayanasami, the scheme received wide acceptability and the bank has, so far, financed more than 10,000 two-wheeler loans to the farmers. Under this scheme, loans up to Rs 40,000 or 85 per cent of the value of the vehicle would be financed.

The loans carry a simple interest rate of 9.75 per cent per annum payable in five years. During the current fiscal, the bank proposes to finance 4,000 farmers under the scheme.

The bank had, earlier, entered into an alliance with Bajaj Auto Ltd for financing two-wheelers both under `Kisan Chakra' and personal loan segment. Both Bajaj dealers and Andhra Bank branches would be sourcing two-wheeler loan business using each other's customer database and premises for sale promotional activities.

Since the signing of the MoU with Bajaj Auto, the bank has financed more than 1,000 vehicles. Mr Narayanasami said exclusive campaigns would be conducted at different centres and Andhra Bank branches would work with Bajaj dealers for increasing the bank's portfolio under two-wheeler financing.

Stating that around three lakh two-wheelers were sold annually in Andhra Pradesh, he said the sales volume was estimated at around Rs 1,200 crore.

As a leading two-wheeler manufacturing company Bajaj has large scope to capture more market and as lead bank of Andhra Pradesh, Andhra Bank can increase its two-wheeler portfolio.

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