Public sector lender Indian Bank has signed an agreement with TVS Motor Company whereby the lender will finance vehicles manufactured by TVS.

"The MoU will help to bring three wheeler drivers into structured banking and enhance Bank's collateral free lending," Indian Bank Chairman T M Bhasin said.

The tie up will lead to the loan book of the bank rise to Rs10 crore by March 2011 and it expects to reach a target of Rs 75 crore by the next fiscal.

"Besides Indian Bank we are having tie-up with other public sector undertaking bank .. But this will highly benefit the borrower as they (Indian Bank) offers them to pay about 15 per cent on the on-road price of the vehicle which is comparatively lower.." TVS Motor Company Vice-President (Sales and Service) Three Wheeler division K Srinivasan said.

The service following the tie up will be available across all the 1828 branches of the bank.