The State Bank of India (SBI) is the largest bank in the country at present and has a huge customer base. The bank has recently announced a dip of 0.25 percent in the interest rates for car loan. SBI now has the minimum interest rate of 11.25 percent which has come as a relief to customers who are seeking a car loan. The competitive banks have higher car loan rates which are: 11.50 percent to 12.25 percent by HDFC bank and 11.50 percent to 14.75 percent by the ICICI bank. This drop in the interest rate is expected to encourage the car sales in the country. The Indian automobile sector has been facing a ramp down in the car sales since the moment hike in excise duty came in effect to top the already high interest rates. According to the Chief General Manager of Maruti Suzuki India Ltd, Mr. Shashank Srivastava, this move of SBI is definitely going to prove very positive for the future of cars in India.
He added that the currently 70 percent of car purchases are being done through the loans and SBI is the largest auto loan provider whose market share is 16 percent and this move of cutting interest rates by 0.25 percent for auto loans will be a great help in pushing up the dropping sales. According to some auto analysts, the auto manufacturers should take a breath since the time is too soon to begin any kind of celebrations. They suggest that the 0.25 percent as the amount of cut is way too less and is not so much of relief for either party. This move undoubtedly a sentiment booster but there is a lot of time to kill before this minimal cut in the interest rate translates into ascending sales at the ground level. The exact results for auto companies will take another four to five months before getting reflected in sales, experts add.