Tuesday, April 24, 2012
By Manoj Kumawat
SBI slumps car loan rates by 75 BPS
Good news for car buyers, India’s leading bank, the State Bank of India has sliced their auto loan rates by 75 basis points which now stand at 11.25%. After SBI took this decision other big lenders can also think about slashing the auto loans substantially. Car buyers can now make the most of this offer and can save Rs 40 on every lakh. The EMIs on Rs 1 lakh split over seven years will now cost around Rs 1,725 instead of Rs 1,765.
India is a thriving and sensitive auto market and to keep pace with a leading and one of the most trusted banks like SBI, other auto lenders will have to follow into the same steps. The slump in the lending and deposit rates is a result of the fall out of the RBI to signal much inexpensive funds by slashing its repo rate by 50 basis points in the monetary policy.
This move will not only amend the credit worthiness of the Indian banks but will also curtail the experience of bad loans. Depreciation in interest rates will initiate a car loan rate war amongst the lenders. However car buyers can now take a sigh of relief along with the auto makers who can now expect the car sales to increase substantially. Inflation and hike in cess rates had been stagnating the car sales of late, with this move it seems car makers can foresee a better year in terms of sales and growth.