The country's second largest private lender, HDFC Bank has decided to cut the auto loan rates on both on personal and commercial vehicles by up to 150 basis points.
The bank is likely to reduce the interest rates from January 20th and give a relief to the auto loan seekers who had postponed their purchase due to the unaffordable rates prevailing in the market.
HDFC Bank Head (Retail assets and credit cards), Pralay Mondal informed that the car and commercial vehicle loans rates will be cut by 125 basis points and interest rate on two-wheeler loans will be reduced by 150 basis points.
Moreover the bank has steeped forward to benefit the small and medium enterprises and large companies by announcing its plans of rate cut on corporate loans and wholesale credit. In addition the personal loan rates are likely to come down by 75 to100 basis points from existing 17 to17.5%.
Mr Mondal said, "We have been able to pass on such a massive reduction to customer as cost of fund has eased and it is slated to come down further in the coming months."
The bank claims this move to be proactive measure to support the auto sales, which is witnessing a continuous slowdown in the recent past, as well as the ailing SME and manufacturing sector.
In December, the auto sales in the domestic market declined by 18.2% due to the major fall in the commercial vehicles and two-wheeler sales.
Presently HDFC offers car loans at 13.5% to 14% while loans for commercial vehicle and two-wheelers are extended at 14.5% to 15% and 24% to 24.5% respectively.
HDFC has also decided to reduce the interest rates on loans against properties and securities by up to 200 basis points. Mondal said that the rates against property will come down by 150 to 200 basis points and those against securities will be reduced by 100 basis points.
Currently the bank offers such loans at rates ranging between 13.75% and 15.25%.
Meanwhile the bank is also extending retail loan at a discount to its customers. Depending upon the credit profile of the customer, HDFC is giving 50 to100 basis points concession on the card rates.
Recently the bank has also reduced its prime lending rate (PLR) by 50 basis points to 14.5%.