Public sector banks most preferred for auto loans

Public sector banks are moving on a fast track in the sanctioning of auto loans. Now more and more customers are knocking on their doors for auto loans rather than private banks because the public sector banks are sanctioning the loans at the same speed – two or three days and are also offering lower interest rates.

Earlier the private banks were leading the race. Now the private banks have become stringent in financing auto loans due to the global financial crisis. The public sector banks are making use of this opportunity.

For instance recently Mr Wilfred Minz, a supervisor at Life Insurance Corporation planned to get his Alto financed. Therefore he approached the State Bank of Patiala who offered him an interest rate of 12.25 per cent, while private banks rates start from 13 per cent and go as high as 18-19 per cent. The bank was fast in sanctioning the loan. Mr Minz recounts, “My experience has been that despite the extensive documentation they need (public sector banks), I did not have to run around and my loan got sanctioned in just two days,”

Alike, Mr Ramesh Khanna, a marketing manager, had got his Ford Ikon financed from the State Bank of India last month and was taken aback with the public sector bank’s promptness of service.

“It was hassle-free. I could not believe that a SBI official would come even at 9 p.m. to verify my documents,” he said.

A Maruti Suzuki dealer said, “Earlier public sector banks were taking a week or longer to grant auto loans and private banks were doing it in two-three days. Now it is the other way around. In the earlier days private sector banks were not so stringent in lending. Even without Form 16, if the customers had two years in a stable job, the loan got sanctioned. Public sector banks have more checks. Despite this, they are now at par, or even quicker in lending."

Even the carmakers are increasingly betting on public sector banks as private banks are cutting down on vehicle financing. Mr Mayank Pareek, Executive Officer Marketing and Sales, Maruti Suzuki India Ltd. pointed out, “Public sector banks are lending in such difficult times. Though this can help sustain business, for growth to happen there has to be more lending.”

As per bank sources, due to the slowdown, ICICI Bank’s share in financing Maruti cars has cut down to about 1,100 cars a month from the 11,000 cars which was used to be in its hey day. However SBI’s share has grown to 14,000 units a month from around 8,000. Hyundai even has State Bank of India as the second largest financier for its cars.

“The share of public sector banks in financing Hyundai cars has been growing despite their stringent lending norms, but there is scope for more aggression,” said Mr Arvind Saxena Senior Vice-President, Sales and Marketing, Hyundai India.

TimesofMoney & Barclays Bank to launch Barclays Online Money Transfer service

TimesofMoney a leading e-payments and remittance service provider, tied-up with global financial services major, Barclays, to launch Barclays Online Money Transfer, a remittance service, in the UK.

According to a press release issued by the bank after the launch of Barclays Online Money Transfer the bank's customers in the UK will be able to transfer money online directly to any Barclay’s account anywhere in India.

As per release in the near future the services will be extended to other countries as well.

TimesofMoney's President, Avijit Nanda, stated that "with Barclays Bank joining TimesofMoney as a banking partner, it will help us extend our offering to the customers enabling secure online payments."

He added, "With the extension of our white-labeled solutions, our partners can conduct their business with a higher level of security and greater convenience".

Barclays' Global Retail and Commercial Banking, Managing Director, India and Indian Ocean, Samir Bhatia, said that "having partnered with TimesofMoney, who possess strong technology and risk management capabilities in the domain; we are now ready to offer convenient and secure remittance service to our customers and establish our presence in the segment."