MSME Banking

Small Road Transport Operators-SRTO


To assist transport operators (existing as well as new entrants) and to provide self-employment opportunities by making cheaper and easier credit available for purchasing Trucks, buses, Taxi cars, auto-rickshaw, tempos, Three wheelers or station wagons to be applied for commercial transportation of passengers and goods.



An individual, transporter operator, an association, Sole Proprietor, Partnership firms, Private Ltd. Companies, Public Ltd. Companies desirous of owning transport vehicle(s), for carrying passengers or goods on hire, are eligible for financing under the Scheme.

The borrower(s) hold the necessary driving license or engage driver (s) possessing valid license to operate the type of vehicle for which credit is sought.

While financing Owner Driver of Trucks, buses, taxi-car, three-wheeler, auto rickshaw, pick-ups, station wagons, tempo, E-Rikshaw or E-Cart it must be ensured that the borrower necessarily hold a valid driving license to operate the type of vehicle for which credit is sought and have arranged to buy a vehicle in their own names.

The borrower(s) should possess a valid permit to ply vehicle(s) for passengers or goods. Permit can be obtained at a Post- sanction stage, wherever it is not possible to obtain it at a pre-sanction stage to ply commercially.


Approval of Vehicles to be financed: 

Branches may finance various models of the Reputed Manufacturing Companies (RMCs) in the following segments:

(i) Heavy Commercial Vehicles (HCV)

(ii) Medium Commercial Vehicles (MCV)

(iii) Light Commercial Vehicles (LCV)

(iv) Medium Utility Vehicles (MUV)

(v) Small Utility Vehicles (SUV)



Advance under the Scheme may be allowed for purchase of new or old (not more than 3 years old) vehicle(s). Advance will be allowed for purchase of one or more vehicle(s) after giving due consideration to viability of the transport operator(s) and construction of body thereon including purchase of fare-meter, registration, insurance and taxes etc.






85% of on road price i.e. Cost of chasis, construction of body plus fare meter, insurance, registration & taxes etc.



15% of on road price i.e. Cost of chasis, construction of body plus fare meter, insurance, registration & taxes etc.



The advance(s) with interest will be repaid in a maximum period of 60 months by monthly installments, starting from the date when the vehicle is put on the road for commercial use or after completion of two months from the date of advance, whichever is earlier.

Repayment period may be extend on merits from 60 months to 72 months.



Vehicle purchased with the amount of the loan will remain hypothecated to the bank as security of the advance and shall be registered with the Motor Vehicles Authority in the joint names of the borrower and the bank as ‘Hypothecator” and the ‘Hypothecatee’ respectively.

With a view to provide constructive evidence of the Bank’s charge over the Vehicles hypothecated to the Bank, lending branches should get the words “Financed by Madhya Bihar Gramin Bank, BO: _______________________ painted on the Vehicle at a conspicuous place.



As per RBI/Bank’s norm time to time. 


The borrowers will be required to obtain a comprehensive insurance policy including civil commotion and riots in respect of vehicle (s) hypothecated to the bank in the joint name of the borrower (s) and the bank as “Hypothecator and Hypothecatee” respectively. The Insurance Policy will be deposited with the lending office. 

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