Uttar Bihar Gramin Bank Power Tiller/ Agricultural Machinery Loan

Want to mechanize your farm work without burning a hole in your pocket? The Uttar Bihar Gramin Bank (UBGB) Power Tiller & Agricultural Machinery Loan gives cultivators a clean, predictable way to buy power tillers and other farm equipment—with seasonal repayments that match your harvest cycle, and pricing you can plan around. Here’s a simple, no-jargon guide to help you decide quickly and borrow smart.

What this loan covers (Purpose)

This is a Term Loan for buying power tillers and allied implements (e.g., rotavator, plough, seed drill, water pump). The aim is straightforward: reduce labor bottlenecks, finish field operations on time, and lift yield per acre. If you also do hiring services for neighbors, the machine can start paying for itself even faster.

Who can apply (Eligibility at a glance)

• Age: 18–60 years
• Residence: Permanent resident of UBGB’s command area
• Landholding: Minimum 1 acre of irrigated land
• Experience: At least 600 hours of hiring/operating experience
• Credit track: No loan defaults with any bank/NBFC

(Why these checks?) The bank wants to see that the machine will be used productively and maintained well—your land, irrigation, and operating experience all signal that.

How much you can borrow (Loan eligibility & margin)

• Bank finance: up to 85% of the machine’s total cost
• Your margin: 15% (your contribution/down payment)

Quick feel example: If your tiller + implements cost ₹2.50 lakh on-road, the bank may finance up to ₹2.125 lakh (85%), and you bring ₹37,500 (15%). Final sanction depends on appraisal and documentation.

Pricing you can plan for (Interest rate)

• Indicative ROI: 12.5% p.a. at half-yearly rests (subject to change as per policy)
  Your sanction letter will show the exact rate and how interest is applied. Because rests are half-yearly and your repayment is also half-yearly, the math stays tidy.

Tenure that follows your crop cash flow (Repayment)

• Loan tenure: 3–5 years
• Repayment frequency: Half-yearly installments, timed around harvest and sale proceeds

Tip: If you grow two shorter-duration crops, you can align installments after each marketing window. If you run a hiring service during off-season, consider part-payments right after peak demand to save interest.

How money moves (Disbursement)

UBGB pays the supplier/dealer directly by cheque/draft after paperwork and hypothecation are in place. You get transparent pricing and quick delivery without juggling large transfers.

What you pledge (Security) & risk cover (Insurance)

• Primary security: Hypothecation of the financed tiller and implements (bank’s charge noted on the RC/invoice)
• Collateral security:Registered mortgage of 1 acre irrigated land
  • Exception: If you provide 100% liquid security, land mortgage isn’t required (the branch will explain acceptable forms of liquid security).
• Insurance: Comprehensive insurance with bank clause is mandatory. Consider add-ons (zero-dep, roadside assistance) if terrain and usage are demanding.

Big help from the state (Subsidy)

Under the State Government’s Farm Mechanization program, eligible beneficiaries can receive 50% of the bill amount or up to ₹60,000 (whichever is lower) as subsidy.

• The beneficiary is responsible for completing the process and ensuring release/realization of the subsidy.
  Pro tip: Start the subsidy paperwork in parallel with your loan application so installation and claim timelines line up.

Choosing the right machine (Capacity & attachments)

• Match horsepower to soil type and acreage. Oversizing raises fuel and maintenance without proportional gains.
• Pick essential implements first (e.g., rotavator + plough) and add extras after you stabilize cash flows.
• Fuel efficiency & service network matter. A slightly cheaper model without local service can cost more in downtime.

Step-by-step: from quote to field

1. Collect a dealer proforma invoice (on-road cost + implement list + warranty).
2. Visit your UBGB branch with KYC, land papers, irrigation proof, and a simple utilization plan (own farm + hiring hours).
3. Sanction discussion: Bank sizes the loan (≤85%), confirms ROI, tenure, security, and the subsidy pathway.
4. Documentation & hypothecation: Complete mortgage/pledge papers; arrange comprehensive insurance with bank clause.
5. Disbursement to dealer: Delivery, RC endorsement with bank clause.
6. Operate & repay: Half-yearly installments post-harvest; prepay whenever you get strong hiring income.

What to carry (Documents checklist)

• KYC: PAN (or Form 60/61), photo ID, address proof, photographs
• Land records showing at least 1 acre irrigated; irrigation proof where relevant
• Experience evidence (service/hiring records, references) to support 600 hours claim
• Dealer quotation/proforma invoice with full cost breakup
• Insurance proposal for comprehensive cover with bank clause
• Any existing loan details and recent bank statements if requested

Neat, complete papers = faster appraisal and cleaner disbursal.

Practical tips to keep installments light

• Lock early demand: Even 100–150 paid hours per season can offset a big chunk of the installment. Talk to neighbors and FPOs now.
• Service on schedule: Oil, filters, belts, and greasing at prescribed intervals prevent breakdowns during sowing/harvest crunch.
• Protect tyres & drivetrain: Correct tyre pressure and balanced loads save fuel and cut repair bills.
• Fuel discipline: Maintain a logbook; small leakages or pilferage add up over a season.
• Use subsidy wisely: Direct a portion toward a high-impact implement (e.g., rotavator) that raises paid hours immediately.
• Part-prepay after peaks: When hiring demand surges (harvest prep), use the extra cash to reduce principal—this saves interest over the remaining years.

FAQs (straight answers)

Is this only for owners of irrigated land?
Yes—minimum 1 acre irrigated is required for this scheme.

Can I skip land mortgage?
Only if you provide 100% liquid security acceptable to the bank; otherwise, registered mortgage of 1 acre irrigated land applies.

Who receives the loan money?
UBGB pays the dealer/supplier directly.

How long can I take to repay?
3–5 years, with half-yearly installments.

What if the machine is used for hiring?
That’s encouraged—your 600 hours experience and future hiring plan strengthen your case and help EMIs pay for themselves.

What about documents after delivery?
One key and a copy of the RC (with bank clause) remain in branch custody as a security protocol.

---

Bottom line: UBGB’s Power Tiller & Agricultural Machinery Loan is built for real farm economics—up to 85% finance, 15% margin, 12.5% half-yearly pricing, 3–5 year tenure with harvest-aligned repayments, direct dealer disbursal, strong risk cover, and state subsidy support up to 50% (max ₹60,000). Bring your KYC, land papers, and a dealer quote to the nearest UBGB branch—and turn timely field work into dependable, higher farm income.