India’s largest lender State Bank of India (SBI) has put
some restrictions in its car loan segment, in a move to bring down the rising
cases of defaults. According to media reports, the bank announced that the eligibility
limit for loan issuance for salaried individual for car purchases was raised
from Rs 2.5 lakh per annum to Rs 6 lakh per annum for non-SBI bank account
holder. The limit has been raised to Rs 4.5 lakh for SBI account holder. The
report from Economic Times said that SBI has also increased the service charges
by 0.51 per cent. Analysts said that the move will directly have an impact
on sales of passenger car makers which are already reeling under high interest
costs and slowing economy. Meanwhile, the report cited a private bank executive
as saying that defaults in two-wheeler loan segment has gone up by 3-4 per cent
in last few months. The move comes at a time when Finance Ministry has been
pulling up public sector lenders to take action against defaulters and bring
down their NPAs.
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