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SBI hikes sops for Maruti dealers, lowers loan rates
(Hindu Businessline)
Vinson Kurian
Thiruvananthapuram , Feb. 9
STATE Bank of India, which pioneered a tie-up with Maruti Udyog for cross-selling Maruti vehicles and SBI vehicle loans two years ago , has restructured the arrangement with dealers to stay in competition.
The country's largest public sector bank is offering incentives ranging from 1 per cent to 1.5 per cent of the loan amount to dealers in the new car loan scheme, which will be launched on February 15. Private sector players are offering up to three per cent as dealer margin, according to sources in the industry.
As per the new SBI arrangement, incentives to dealers will work out in the following manner: Up to 10 cars per month: 1 per cent of the loan amount per car; above 10 and up to 25 cars per month: 1.25 per cent ; and above 25 cars per month: 1.50 per cent.
One percentage point of the loan amount will be paid to the dealer on the spot and the rest at the end of the month. The bank has also lowered the interest rates (floating) and the equated monthly instalments (EMI).
For loans above Rs 8 lakh, the interest rate will be 7.50 per cent for three years and the EMI, Rs 3,111 per lakh.
Original features of the loan scheme provided for 10.50 per cent for repayments up to three years and 11.25 per cent for repayments up to seven years.
The scheme does not have pre-closure charges. It offers up to 30 per cent discount on extended warranty charges and a life insurance cover for the borrowers for which SBI will pay the premium.
Eligibility has been fixed at up to 30 months for the net monthly income, maximum loan amount being 85 per cent of the on-road cost of the car. There is no processing fee and interests are charged on a daily diminishing basis.
The offer also includes a free personal accident insurance cover, a free SBI card and an Internet banking facility.
The SBI Personal Banking Branch at Kesavadasapuram here, among the first to reach 1,000 loans under the scheme, has now raised the tally to 1,150.
