ICICI Bank the largest private sector bank has decided to slash its auto loan rates by 50 basis points to 10.5-11 per cent, before the festival season. The bank is taking this measure in line with its target of growing its retail book.
A senior ICICI Bank official pointed out, “The reduction in rate would be announced in a day or two; the team is still working out the finer details”.
Currently the bank has set auto loans at 11-11.5 per cent. Previously at its peak, the auto loans were available at 12-13 per cent.
In June bank’s total auto loan portfolio accounted to Rs 25,920 crore, out of which Rs 10,000 crore is retail auto loan.
The bank has decided to focus on four-wheeler loans which will be disbursed by its branches. It will not be selling through the direct selling agent.
Over the past two years bank completely stopped giving two-wheeler loans and on four-wheeler loans it has been going slow.
Chanda Kochhar, managing director and CEO of ICICI Bank, has been claiming that now it is the right time that the bank can revert its well rounded growth in portfolios as there has been increase in the domestic demand and retail customers have also started spending.
In her speech at the MSME (micro and small and medium enterprises) conclave, Kochhar said until January the demand for retail products had dropped especially home loans, the decline was of 50 per cent. She added, “But from January, I clearly see a 50 per cent rise in demand. So we are focusing on all segments in line with the revival in demand. MSME will continue to be a focus area for the bank as the segment contributes 40 per cent of the country’s industrial production and forms 35 per cent of the total exports”.
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