Refinance Schemes

Small Road and Water Transport Operators (SRWTO) Scheme

Borrowers

Individuals, groups of individuals including partnership/ proprietary firms and co-operative enterprises would be eligible for assistance under the scheme.  The borrowers should be from the "rural areas" and should utilise the vehicle mainly for transportation of rural  farm and non-farm products and inputs and passengers to/ from marketing centres.

Vehicles

1. The vehicle should be duly registered with Regional Transport Authority (RTA) as 'public goods/ passenger carrier' vehicle.
2. The number of vehicles to be financed shall be subject to the ceiling on such number as stipulated by RBI for financing under priority sector lending (at present 10 vehicles).
3. Water transport units such as boats, launches, etc., are eligible to be covered.
4. Financing small refrigerated vans, bulk carriers for edible oil, petroleum, etc., would also be eligible for refinance.
5. Loans for purchase of second-hand vehicles are also eligible for refinance, provided the financing bank is satisfied with the valuation of the vehicle, documentation, economic life of the vehicle, etc.
6. The loan component may include the cost of chassis, body building expenses, initial taxes, insurance, etc. The loan disbursement under the scheme should be made directly to the supplier and/ or concerned agencies.
7. Two wheelers are not eligible for refinance under this scheme and can be covered under service sector activities of the Enterprise Loan Scheme.
8. There is no restriction on the Gross Vehicle Weight (GVW) / tonnage of the vehicle proposed to be purchased.
9. Financial assistance for purchase of additional vehicles will also be eligible, provided the same falls under Priority Sector Lending.
10. Vehicles registered as 'private carriers' will not be covered under the scheme. 

Security and Insurance

1. The vehicle should be registered as 'public goods/ passenger carrier' with the Regional Transport Authority (RTA).  The loan will be advanced against the hypothecation of the vehicle in favour of the financing institution.  The hypothecation clause/ bank's lien should be noted with the RTA.
2. The vehicle should be comprehensively insured for the full value covering all risks. The insurance policy may be either in the joint names of the borrower and the bank or assigned in favour of the latter.  The vehicle should be adequately insured at all times without any break.
3. The vehicle should be inspected periodically by the financing bank.

Repayment

The repayment period may be fixed taking into account the economic life of the vehicle financed and repayment capacity of the borrower. Generally, the loan is repayable within 5 years with a moratorium period of 6 months.