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Citicorp, the 100 per cent Citibank subsidiary, has entered into a 80:20 joint venture with the asset-financing non banking financing company (NBFC) Shrachi Securities Ltd (Shrachi) for truck financing.

Shrachi managing director Ravi Todi said that the profits and losses will also be shared in the 80:20 proportion. "Citicorp will use our extensive network for day to day management of truck financing", Todi said. This will primarily entail introduction of clients to Citicorp, the truck financing arm of Citibank.

The process will be initiated in West Bengal and gradually spread out over the rest of India. Shrachi will also collect a management fee from Citicorp.

 

A few months ago, GE Capital has selected Shrachi as its recovery agent as the company has a strong infrastructure base with 14 branches. Truck financing accounts for 95 per cent of its total assets.

Earlier at a press conference, Todi disclosed the group's plan to form a joint venture company with a foreign partner for manufacturing power tillers. Bengal Tool, the agro division of Shrachi group, will set up the Rs 14-crore plant on 1.5 acres of land in Calcutta through the joint venture. The annual production of the Calcutta plant will be around 5000 or 6000 power tillers. Shrachi group will borrow funds from the financial institutions and banks for funding the project.

The group has shortlisted five overseas companies for the purpose - Kubota from Japan, Deadong and Tongyang of Korea, Changzhou Amec Import and Export Corporation and Zhejiang Sifang Group Import and Export Corporation of China.

Shrachi group is already in the field of assembly and distribution of 12-15 HP range for which there is an agreement with the two Chinese companies mentioned above for importing components.

The present assembly plant is at Pondicherry with a capacity of 1,000 power tillers per annum.