In Chennai the State Bank of India (SBI) and other nationalized banks have made possible the December sales major auto players after most of the private sector banks have stopped auto loans which led to decline in auto sales.
Official sources informed Express, “SBI registered a 10 per cent hike in loan demand in the metro in December, compared to the rest of the year. Normally, on an average, we receive 25 applications for loan demands per day”.
This was followed by the Cenvat cut of four per cent by the Centre and resultant decline in discounts by car majors fueling demand.
Private Banks had cut down their auto loan segments by almost 35 to 40 per cent have also contributed to the PSU bank’s lending.
Sources said, “SBI sanctioned and disbursed 372 vehicle loans totaling Rs 12.32 crore to customers of Maruti Suzuki, Hyundai Motor India,
Thus the most beneficiaries of the lion’s share were Maruti customers at 30 per cent of the total disbursements and Hyundai at 25 per cent. Other vehicle manufacturers brought up the rear.
Besides this the bank did not rejected any loan demand during this month as compared to its customary five per cent rejections each month. Though, it is believed that 10 per cent applications have been returned due to lack of proper documentation.
In the meantime, the banking organization is expectant of another downslide in interest rates by 0.5 per cent in January that would further boost their loan segments.
On the other hand SBI also saw a dip in auto loan demands by 30 per cent in FY’ 09, vis-à-vis FY’08. This is due to high interest rates for auto loans prevailed till uneven a couple of months ago. As 75 per cent of the industry’s sales is dependent on bank financing for vehicles, sales were hit during the year.
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