SBI to focus more on auto loans

Says the auto sector is expected to report a healthy growth this year

State Bank of India (SBI) is planning to focus more on auto loans as the sector is expecting better growth.

Speaking to reporters after announcing the bank's special finance scheme for Ola driver entrepreneurs in Chennai on Monday, PS Prakash Rao, chief general manager, SBI, said that the auto sector was expected to report a healthy growth this year.

On an average, the bank has been funding 2,000 cars a day since the last two months, which indicates an aggressive push in its auto portfolio, he added.

In the last three months, the bank's auto portfolio grew 18 per cent, as compared to the corresponding period in the previous year, Rao said, adding that the bank had entered into a tie-up with Ola for financing the new vehicles purchased by driver entrepreneurs, who will be identified and recommended by the cab operator.

Rao further said that the driver-cum-entrepreneurs would benefit from the lower down payment of around 10 per cent, easier documentation and a faster loan approval process. The repayment of the loan amount would come from the daily earnings from the vehicle and Ola will work closely with SBI to provide a better and prompt repayment process.

Anand Subramanian, director (marketing communications) of Ola, said that the cab operator came up with several such initiatives in the last two years to foster entrepreneurship among drivers.Recently, Ola had set up a fund of Rs 100 crore to enable drivers buy their own cars and turn driver entrepreneurs and tied up with Mahindra Finance and Cholamandalam Investment and Finance Co for similar schemes.