The Hindu : SBI, MUL join hands for car finance

Online edition of India's National Newspaper
Thursday, Feb 13, 2003

Business

Business

SBI, MUL join hands for car finance

By Our Special Correspondent

MUMBAI FEB. 12. State Bank of India today tied up with Maruti Udyog Ltd to enter the car finance field. The new entity will be known as SBI-Maruti Finance.

In the first phase, SBI-Maruti Finance has been launched in 37 cities. The new venture will offer car loans through the combined network of SBI branches and Maruti outlets.

Both will also utilise each other's existing customer base to cross-sell Maruti vehicles and SBI car loans. SBI has agreed to extend excusivity to the alliance with MUL and will not undertake any new tieups with car manufacturers at the national level. Maruti will reciprocate by not entering into a similar arrangement with any other public sector bank.

Further, both partners will be able to access each other's distribution network for promotional activities and to reach customers. They will also collaborate in communicating the benefits offered to customers through joint advertising and promotional activity.

To facilitate car finance to customers, SBI would specially identify people at local branches to service Maruti dealer outlets, A. K. Purwar, Chairman, SBI, said at a press conference here to launch the new entity. He said, "this tie up with Maruti will help SBI in its endeavour to provide vehicle finance quickly and on easy terms with best deals and bargains.'' He further emphasised that complete transparency would be one of the key features of the tie-up and all benefits provided by manufacturer and dealers would be passed on to the customers.

Maruti would extend support through various sales promotion schemes and offers, said, Jagdish Khattar, Managing Director of Maruti Udyog. He also said "the focused approach through this new partnership and close association will better enable us to tap the large untapped potential in the country.''

Answering a question on housing finance of SBI, its Managing Director, P. N. Venkatachalam, said the bank was considering passing on the benefits of reduced interest rates to the existing borrowers. The proposal was now being considered by the board. Apart from this, the MD said, the bank was thinking about having a separate prime lending rate (PLR) for housing finance.

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