• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Priyanka Vyas

Advertisement

New Delhi, Feb. 23 It is now not just the customers but even the dealers of two-wheelers who will come under scrutiny for loan defaults, as many banks pull out of financing the segment in many parts of the country.

According to two-wheeler companies and banks, one of the reasons for high defaults has been dealers’ negligence to ensure registration of vehicles.

“Manufacturers would be required to put pressure on the dealers to ensure registration of vehicles. Unlike in the metros and other smaller cities where dealers are required to register the vehicles, in many of the interior regions dealers sell the vehicles which later don’t get registered. This makes it difficult for the banks to retrieve the vehicle even if there are defaults,” said Mr Rajan Pental, Senior Vice-President, Vehicle Finance, HDFC Bank.

Bajaj Auto, the second-largest two-wheeler company, has seen sales of its vehicles through financing drop to 44-45 per cent from 60 per cent in the last one-and-a-half years.

“Dealers can certainly play a role by ensuring registration of vehicles. The problem persists in many areas such as Punjab and Haryana where the dealers are expected to register the vehicle. But in certain belts, individuals are required to bring the vehicle to the regional transport offices for registration. In such cases, dealers have no role to play,” said Mr S. Sridhar, CEO, Bajaj Auto.

He said his company was also working towards strengthening Bajaj Auto Finance Ltd and the impact would be felt in the next 6-8 months. He said the company would have a tie-up with one or two banks with uniform products that would be available at its dealerships.

Hero Honda said it worked closely with its dealers and financiers in the case of bikes sold through finance.

More Stories on : Two/Three Wheelers | Non-Performing Assets | Channels and Franchises | Bajaj Auto Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Global players keen to firm up insurance partnerships

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line