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Hike In Automobile Loan Interest
Experts feel that the demand for auto loans has triggered the increase in interest rates. Depending on the mid-quarterly review of RBI, the banks may decide on the rise of interest rates of car and bike loans.
Auto makers have already hiked their prices multiple times - first in January due to rise in input costs, next was a two per cent excise duty hike in the Union budget and third was the introduction of the new emission norms. The fourth hike was announced recently due to increase in raw material fairs such as rubber and steel.
The Society of Indian Automobile Manufacturers (SIAM) says the auto loans segment is witnessing rapid growth with passenger car sales in the country escalating 38 per cent to over 1.58 lakh vehicles this year when compared to 2009.
HDFC bank is the leading player in car loan sectors, with over Rs 1,400 crore of disbursals per month. On the other hand, India's largest public sector's 'State Bank of India' distributed over Rs. 1,303 crore in auto loans during the quarter ended June 30th.
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