State Bank of India (SBI) also referred to as the largest public sector bank in India declared a decrease in the car loan interest rates. This was brought into effects from April 24 2012. The cut in rate is expected to enhance the economic activity in the Indian auto industry. Furthermore, the decrease in the interest rates makes car loans by SBI car the most affordable in the entire banking industry at about 11.25 percent. This is lower as compared to 11.50-12.25 percent by HDFC Bank. This is also lower as compared to the 11.50-14.75 percent offered by ICICI Bank.
The decision of SBI bank to slash down interest rates has come right after a reduction of 0.5 percent in the rate of repo announced by Reserve Bank of India (RBI). A dictate has also been given out to all banks run by state to cut down on lending rates with instant effect.
The Indian auto industry observed momentous slowdown in sales of car in the year 2011 accredited mainly to the high interest charges and hike in prices of fuel that reduced consumer's buying sentimentalities. In the financial year 2012-13 fiscal, auto manufacturers in India have been anticipating a discount in rates of interest with the hope that it would support reasonable loans and improve car sales.
This is definitely good news for all those who have been looking forward to get some discounts on insurance for their cars. SBI has given hopes to car owners who have been facing the pressure of increasing prices of insurance across the nation. The decision will definitely create a new trend altogether. It is expected that the trend will be followed by other insurance companies; especially by private players in the industry.