At 11.25%, SBI offers cheapest car loans | Used Car Loan Blog

of total advances, reduced interest rates on auto loans by 75 basis points from 12 per cent to 11.25 per cent and interest rates on loans to select small and medium enterprises (SME) by up to 200 basis points effective April 21. SBI is yet to make a formal announcement. Interest rates on home loans will remain unchanged.

For now, the bank has decided to keep the base rate intact, but has decided to ease the lending rates wherever interest rates are on the higher side. SME loans up to Rs 1 lakh covered under the credit guarantee fund for micro and small enterprises will stand to benefit the most under these reductions.

Following this, SBI will offer the cheapest car loans. Competitors HDFC Bank charges 11.50 to 12.25 per cent for loans of 49 to 60 months and ICICI Bank charges 11.50 to 14.75 per cent for loans between 36 and 60 months. Car loans are generally fixed-tenure loans of five to seven years.

Diwakar Gupta, managing director and chief financial officer, SBI told Financial Chronicle, ?The auto loans have been reduced by 75 basis points and loans to small, micro and medium enterprises have been reduced by up to 200 basis points, depending on the product category. The easing of rates are at the product level, so different loan products will see different changes.?

SBI has an auto loan book of close to Rs 20,000 crore, second to HDFC Bank that has an auto loan book of Rs 26,000 crore. The SME loan book of the bank is over Rs 1,32,677 crore. About 66.4 per cent of the book will stand to benefit with the reduction.

For now, it has not made any changes on home loans. But it is one of the few banks that allow customers the advantage of shifting to any of the new lower rates that it offers after paying a fee of one per cent.

The bank will also reprice part of its deposit base of

Rs 10,00,965 crore of which domestic deposits are Rs 9,41,432 crore and deposits at foreign offices Rs 59,533 crore. Of the deposit base, about 47 per cent are lower cost CASA deposits, worth Rs 4,47,358 crore, for which the bank pays only 4.50 per cent interest. Retail term deposits, where the repricing will happen, account for 78.56 per cent of the total term deposits base of Rs 3,88,144 crore.

Due to the large composition of the CASA deposits, reduction in rates are expected to impact its margins only to the extent of six to seven basis points for the few months until the higher cost retail term deposits get repriced.

The bank?s total advances are over Rs 8.69 lakh crore, with domestic advances over Rs 7.3 lakh crore. Large corporate advances are at Rs 1.23 lakh crore, mid-corporate at

Rs 1.66 lakh crore, retail at Rs 1.75 lakh crore and SMEs at Rs 1.3 lakh crore.

manjuab@mydigitalfc.com

We are used car loan creditors that specialize in giving clientele car finance with adverse credit.

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