The Hindu Business Line : Banks in no hurry to launch financing scheme for Nano

However, banks are in no hurry to launch their financing scheme for this ultra low-cost car. One reason is the belief in the vehicle financing industry that Tata Motors has entered into an exclusive arrangement with the State Bank of India for booking it.

“We believe that Tata Motors has entered into an agreement with SBI. Unless we are approached by the company, we may not take the initiative. But our philosophy has been that there is no risk in lending to our existing customers who may be looking to buy the car. We hope to finalise the package for financing the Nano by end of March,” said Mr R.I.S. Sidhu, Chief General Manger, Punjab National Bank.

This has kept the momentum low for many of the banks in taking the lead in structuring the loan package for the Rs 1 lakh car. A few other private sector banks said that they will announce their schemes after reviewing the booking pattern and conditions to ensure that no speculative orders are placed.

“There is still lot of time to decide on the package. In April, the bookings will start and by the time deliveries are made, it could be May or June. We will certainly watch closely whether the maximum number of customers who are booking the car are salaried, first time buyers or second-hand car purchasers and then decide,” said Mr Rajan Pental, Senior Vice-President, Auto loans, HDFC Bank. “After we are clear about the terms and conditions of the bookings, we can take a call. If the minimum amount to reserve a car is very small, there could be lot of speculative booking and later on the car may be transferred to somebody else’s name,” said Mr Sumit Bali, Chief Executive Officer, Kotak Mahindra Prime Ltd.

Banks are of the view that since many of the customers who will be eager to buy the car would be those migrating from a two-wheeler, they could consider varying interest rates depending on the income slab of the buyer.

Related Stories:
Banks gearing up to design special loans for Nano

More Stories on : Consumer Finance | Cars | Tata Motors Ltd

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