SBI becomes first one to ease car loans with more PSBs to follow
The car manufacturers are aiming to push the sluggish car sales to clear of the stacks of inventories and the State Bank of India (SBI) has announced something favourable. Country's largest lender, SBI on Tuesday waived off processing fee on car loans keeping in mind the upcoming festival season. The bank is also offering the lowest interest rate starting 8.70 per cent on car loans, with no escalation in interest.
Solutions to revive auto sales
"Normally, the repayment period is 60 days. So we extend it for 75 days for some dealers and to 90 days for a few others. We are talking to each dealer. We also had meetings with the Federation of Auto Dealers. We are actively engaged with all of them. On a case to case basis, whichever dealer has faced any problem on account of excess inventories, we have been working out solutions for all of them," said P.K. Gupta, Managing Director-Retail & Digital Banking, SBI.
More PSBs to follow
Following the trend, the industry is expecting other PSBs in different formats to make credit cheaply available to the buyers. Officials from at least three public lenders said they would respond to the SBI move in their own way to benefit auto buyers during the festival season.
Sluggish sales performance by auto sector
The auto sector of India is facing a tough phase with sales in July falling to a 20-year low. The current monthly average sales, total projected annual sales of passenger vehicles for 2019-20 are also expected to drop to yearly sales levels seen in 2014-15 and 2015-16.
MCLR cut announced after rate cut by RBI
The latest announcement by the SBI has come after the largest Indian lender on Sunday extended by 15-30 days the loan repayment period for stressed automobile dealers to help them out of current inventory builds-ups. The bank has an exposure of Rs 11,500 crore to auto dealers.
SBI Personal Loans
In order to spread festive joy among customers, the state-owned lender is offering personal loans up to Rs 20 lakh at the lowest interest rate starting from 10.75% with the longest re-payment tenure of 6 years, reducing EMI burden on the customers. The salary account customers can also avail pre-approved digital loans upto Rs 5 lakh through YONO in 4 clicks.
SBI Education Loans
Those who want education loans, the bank is offering this facility at an attractive rate of interest starting from 8.25% for loan upto Rs 50 lakh and upto Rs 1.50 crore for studies in India and abroad respectively. Customers will be offered the longest re-payment tenure of 15 years which effectively will reduce their EMI burden.