State Bank of India, the largest bank in the country has slashed their auto loan rates by 75 basis points to 11.25%. This move will make other big lenders in the auto finance industry to also review and cut rates so as to keep abreast with SBI. Customers now taking advantage of SBI new loan rate cut will be able to save Rs 40 on every lakh. EMIs on a Rs.1 lakh – seven year loan will now be reduced from Rs.1,765 to Rs.1,725.In such a highly sensitive market, other banks and finance companies will also have to follow suit to stay ahead in the competition. This reduction in lending and deposit rates are due to a fall out of the RBI to signal cheaper funds by reducing its repo rate by 50 basis points in the monetary policy dated April 17, 2012.This step will not only improve the credit worthiness of Indian banks but also reduce the incidents of bad loans. Reduction in interest rates will thereby trigger a car loan rate war while it will come as a relief to buyers and auto manufacturing companies who have been suffering due to both inflation and the recent tax increases which came along with the 2012-13 Union Budget.
No comments:
Post a Comment