Primary Cooperative Agriculture and Rural Development Bank: For Tractor Purchase

What is the PCARDB tractor purchase loan?

The Primary Cooperative Agriculture and Rural Development Bank tractor loan is a long-term farm mechanisation credit line of the Cooperation, Food and Consumer Protection Department, Government of Tamil Nadu, delivered through the state's Primary Cooperative Agriculture and Rural Development Banks (PCARDBs). Under it a farmer can borrow up to 90 per cent of the cost of a tractor, at an interest rate reported in the band of 11 to 12.25 per cent a year, with the balance 10 per cent put in by the borrower as margin.

According to the Registrar of Cooperative Societies, 180 Primary Cooperative Agriculture and Rural Development Banks function at taluk and block level in Tamil Nadu. Their remit is long-term credit to farmers; minor irrigation, land development, farm mechanisation, horticulture and animal husbandry. A tractor sits squarely in that remit: it is a capital asset with a working life of a decade or more, and it needs finance repaid over years rather than a crop season.

A tractor changes the economics of a holding in two ways. It removes dependence on hired ploughing at peak sowing time, when rates spike and machines are scarce; and it creates an income stream of its own, because a tractor owner in a Tamil Nadu village almost always does custom hiring for neighbours. Banks appraising a tractor loan look hard at that second stream, particularly where the applicant's own holding is small.

The same PCARD banks operate a parallel power tiller head financing up to 90 per cent of a power tiller at the same rate band. A farmer with a small wetland holding is often better served by the power tiller loan, which involves a much smaller borrowing.

A caution before you commit. The Registrar of Cooperative Societies records that PCARD banks are at present issuing only jewel loans out of the funds available to them. Long-term investment credit at these banks depends on refinance. Ask your taluk bank whether the tractor head is open before you pay for an encumbrance certificate or book a machine with a dealer.

Who is eligible for the PCARD tractor loan?

You can apply if:

• You are a farmer resident in Tamil Nadu, within the area of operation of the PCARD bank in your taluk.
• You own agricultural land in your own name and can produce the chitta, adangal and patta. The extent of land you hold is what the bank uses to judge whether a tractor of the horsepower you want is justified.
• You can produce a clean encumbrance certificate showing the land is free of a prior charge.
• You become a member of the PCARD bank, which is completed alongside the loan.
• You can put in the 10 per cent margin and meet the incidental costs of registration and insurance.
• You are not in default to the PCARD bank, the primary agricultural cooperative credit society or any other bank.

You cannot apply, or will not be sanctioned, if:

• You own no agricultural land. PCARD banks lend against land, and a landless applicant is not eligible under this route.
• The land is already mortgaged to another institution and the charge has not been cleared.
• The patta is not in your name. A common situation where a family partition has never been mutated in the revenue records.
• You are an existing defaulter at any cooperative institution in the taluk.
• You cannot fund the margin. The bank finances up to 90 per cent, not the whole cost, and registration, insurance and the first set of implements are on top.
• You live outside the taluk served by the bank.
• The tractor head is closed for want of funds at the time you apply.

How to apply for the PCARD bank tractor loan

1. Ask at the Primary Cooperative Agriculture and Rural Development Bank in your taluk whether the tractor head is currently open, given the Registrar's note on funds. Do this before spending on anything else.
2. Choose the tractor and get a printed dealer quotation. The proforma invoice must show the model, horsepower, ex-showroom price, taxes, insurance and registration costs separately, because the bank finances against it and pays the dealer directly.
3. Assemble the land documents — a current chitta and adangal, the patta and a fresh encumbrance certificate from the sub-registrar. The encumbrance certificate is the slowest item; start with it.
4. Collect the loan application form at the PCARD bank counter and complete the membership formality.
5. Fill the form completely, attach the quotation, land documents, Aadhaar, address proof, bank passbook and photographs, and self-attest every photocopy.
6. Submit the application and take an acknowledgement with a reference number and date.
7. Attend the field inspection. A bank supervisor verifies the land, the extent held and the cropping pattern, and assesses whether the holding and expected custom hiring support the instalment.
8. Complete the mortgage formalities once the loan is recommended. A registered mortgage over the land is executed, and the tractor itself is hypothecated to the bank.
9. Pay your 10 per cent margin, after which the bank releases the loan directly to the dealer.
10. Register the tractor and endorse the bank's hypothecation on the registration certificate, then collect the repayment schedule in writing.

What documents are required?

What does the loan cost, and how is it repaid?

The reported rate band is 11 to 12.25 per cent a year, subject to change, the same band published for the PCARD power tiller loan. Confirm the live figure at the bank.

Costs that sit outside the loan amount:

• The 10 per cent margin on the tractor cost.
• Stamp duty and registration on the mortgage deed.
• Legal scrutiny and inspection charges.
• Vehicle registration and insurance, which must be renewed annually for the whole loan period and produced to the bank on demand.
• Penal interest on overdue instalments.

Repayment is long-term, typically in annual or half-yearly instalments matched to the harvest cycle, spread over the useful life of the machine. Where custom hiring is part of the appraisal, the instalment is set on the combined income. Ask for the amortisation schedule in writing at disbursement and keep it with the passbook and the insurance policy.

How do I check the status of my application?

Tamil Nadu runs no online tracker for cooperative bank loan applications.

1. Keep the acknowledgement issued at submission.
2. Follow up with the Secretary or Special Officer of the PCARD bank in the taluk, who can say whether the file is at inspection, legal scrutiny or sanction stage.
3. Escalate to the Deputy Registrar of Cooperative Societies at your District Collectorate.
4. Beyond that, the Registrar of Cooperative Societies, Chennai, through rcs.tn.gov.in.

Why tractor loan applications get rejected, and how to fix them

• The head is not funded. Ask explicitly whether the file is rejected or held for want of funds, and ask to be listed for the next allocation.
• Encumbrance certificate discloses a prior mortgage. Redeem the earlier loan and obtain a fresh certificate.
• Patta not in the applicant's name. Apply to the Tahsildar for mutation before filing the loan application.
• Holding too small for the horsepower requested. Either scale down to a smaller tractor or to the power tiller head, or document custom hiring demand in the area.
• Quotation incomplete. A quotation that omits taxes, insurance and registration understates the project cost and forces a revision mid-file.
• Margin not arranged. The 10 per cent has to be real money available at the time of release, not a promise.
• Existing default at the village primary agricultural cooperative credit society. Settle it first; the institutions share defaulter information.

Where do I raise a grievance?

• The Secretary or Special Officer of the Primary Cooperative Agriculture and Rural Development Bank in your taluk.
• The Deputy Registrar of Cooperative Societies at your District Collectorate.
• The Registrar of Cooperative Societies, Chennai, through rcs.tn.gov.in.
• The Assistant Executive Engineer, Agricultural Engineering, for the district, for anything relating to a separate farm machinery subsidy.

No agent or dealer representative can get a cooperative loan sanctioned for a fee. The application form is free at the bank counter, the bank pays the dealer directly, and every charge levied must appear on the sanction letter.