State Bank of India has given the best surprise package to the auto buyers in India. It has announced new car loan interest rates which have dropped to 8 percent for the first year and 10 percent for the next two years. For the remaining period the interest rate will remain 25-75 basis points below the bank PLR rate. These rates become effective from July 01, 2009 and will be offered till 30 September 2009. If this was not enough, the bank has more to offer.
“SBI has set a floor price of 8 per cent for the first year, from the next two years; the borrower will have to pay 10 per cent. But at SBI, it always gives the lowest rates possible after taking into account its cost of funds and it aims to increase its auto loan portfolio and the penetration of auto loans. SBI has been able to find business logic, while others have not been able to,” said a senior bank official.
The new interest rates can be easily termed as a booster shot for the Indian automobile industry that is currently showing flat sales growth. SBI has the largest car loan portfolio in the country which goes a little over Rs. 9000 crores making it the biggest car financer in India.