HDFC Bank not to follow SBI in cutting rates on auto loans
Mumbai: HDFC Bank is not mulling a rate cut on auto loans offering in the near future, a senior official has said.
HDFC bank is not contemplating a rate cut even though SBI announced a reduction of up to 0.50 percent in its auto loan offering earlier this month, Senior Executive Vice President and Business Head for Vehicle Loans Ashok Khanna said.
"Not immediately," he answered, when asked if HDFC Bank will also take a cue from SBI and follow suit with a rate cut.
Khanna said his bank lends up to Rs 1,500 crore on vehicle loans a month, holding a share of 22 percent in the market.
While announcing the rate cut, SBI executives had claimed that the bank held a 19 percent share.
The SBI move, which also included a cut in its home loan rates, was prompted by the twin moves by the RBI over the past two months, wherein it announced a hefty increase in export credit refinance to 50 percent and the one percent cut in statutory liquidity ratio (SLR).
On asked for the reasons for not following suit, Khanna hinted at the size of SBI, which gives the country's largest lender the liberty to cut rates.
When asked about the growth from the segment for HDFC Bank, Khanna said auto lending has been growing at 10 to 15 percent for the bank on an annual basis and stressed that the growth this year is satisfactory.
Khanna said HDFC Bank usually charges anything from 11 to 13 percent for new cars while for the used vehicles, where it lends up to Rs 300 crore per month, the rates go up to 16 percent.
SBI's rate for auto loans across tenures stands at 10.75 percent, post revision.
Khanna said margins have come off from its highs for HDFC Bank within vehicles segment, wherein auto loans have fallen due to the overall gloom in the economy.
"Not as good as they were earlier, but not bad. You control your quality of business, you will not regret," he said, when asked about the margins scenario.