In an attempt to boost the customer demand, country's largest private sector lender, ICICI Bank has made its car loans cheaper by 50-75 basis points.
Quoting spokesperson for ICICI Bank on the move, "We had several car categories/segments for which prices were in the range of 12.5-14.5 per cent (for a typical three-year car finance deal). There has been a recalibration of car categories, which has led to adjustments in prices for certain car segments. Now, the customer rate would be in the range of 12-14 per cent after a 50-75 bps change."
However, the bank refuses to mark the change as a rate cut.
For last 12-15 months, the bank as a part of its loan-book restructuring, went slow in auto loan, home and corporate loans segments. The bank focused on high-risk segments like credit cards, personal loans and two-wheeler loans.
The retail loan portfolio of the bank stood at 96,000-crore (Rs 960 billion) at the end of June 2009, comprising 12 percent of auto loans. The bank is targeting 5 percent growth in its loan book during the current financial year.
The auto loans of the bank fell by 16.5 percent to Rs 11,500 crore as on June end 2009 from Rs 13,800 crore as on March end 2009.
Recently, its public peer IDBI bank reduced rates on its auto loans. The bank also lowered deposit rates on various term deposits.
The ICICI Bank's Benchmark Prime Lending Rate referred to as ICICI Bank Benchmark Advance Rate: ‘I-BAR'. The current I-BAR at 15.75 percent came into effect from June 05, 2009.
The prime lending rate (PLR) of the bank was revised to 14.75 percent, came into effect from June 04, 2009.