After global meltdown, national banks lead in disbursing auto loans

“The too-cautious scrutiny of customer profiles by private banks such as ICICI and HDFC, which earlier occupied more than 90 per cent share in the auto loan market, has resulted in nationalised banks, such as State Bank of

India, Punjab National Bank and State Bank of Patiala, emerging as the new tie-up partners for car companies and dealers,” said Mohit Jindal, regional manager, Maruti Suzuki India Limited.

Maruti has tied up with most nationalised banks for auto loans.

In fact, auto credit was seen as a forbidden territory by foreign banks such as Standard Chartered, HSBC and Citibank much before recessionary times.

But there seems to be no credit squeeze in case of nationalised banks, which are still meeting loan targets aggressively.

“We are disbursing as many loans as possible. On Wednesday, loans amounting to Rs 15 crore, including auto loans, were sanctioned at a credit seminar,” said Punjab National Bank (Marketing) official Ajay Sethi.

After the red tape has been reduced, nationalised banks are also seen as more customer-friendly now. “Though we are still conservative in handing out loans as far as checking the customer profile is concerned, a good credit reputation and security are enough to ensure a timely sanction of loan,” Sethi adds.

In fact, the steep loan interest rates have not seen the market for cars showing signs of slowing down.

Most car companies such as Honda, Skoda and Fiat have launched new cars this year with Maruti launching its middle-segmentcar—A star––on Wednesday.