Persons with annual income less than Rs 6 lakh will not get a car loan from SBI as the bank has tightened eligibility conditions for its four-wheeler loan scheme with a view to minimising possible defaults.
The eligibility limit for loans to salaried individuals, for car purchase, has been raised from Rs 2.5 lakh per annum to Rs 6 lakh per annum, as per the recent circular of the bank.
For SBI account holders, the limit has been raised to Rs 4.5 lakh per annum.
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SBI currently offers car loans at an interest rate of 10.45 per cent, as per the bank’s website.
Giving the rationale for increase in the eligibility criteria, a senior bank official said the decision to revise the gross income limit upwards is taken in view of moderation in the economy.
Economic condition has a bearing on the repayment capacity of the borrowers, the official said, adding this is a pre-emptive step to ward off fresh slippages.
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The bank’s auto loan portfolio grew by 38.71 per cent to Rs 26,411 crore at the end of the first quarter of the current fiscal as against Rs 19,040 crore in the corresponding period of the previous fiscal.
The market share of the bank rose 2.91 per cent against 2.44 per cent in the same period a year ago.
Gross non-performing assets of the bank rose to 5.56 per cent, from 4.99 per cent at the end of the first quarter of 2012-13.
At the same time, net non-performing assets of the bank rose to 2.83 per cent as against 2.22 per cent at the end of June, 2013.
Snapping a nine-month declining streak, domestic passenger car sales grew by 15.37 per cent to 1,33,486 units in August this year, compared to 1,15,705 units in the same month last year.
Industry body Society of Indian Automobile Manufacturers (SIAM), however, played down the rise saying the growth was mainly due to low base effect as a result of the month-long lockout last year at the country’s largest car maker Maruti Suzuki India (MSI) Manesar plant.