ICICI Bank's new offer: Get a personal loan through ATM in three steps

Pre-selected salaried customers can get up to Rs 15 lakh; No offline interaction needed for approval

India’s largest private sector lender, ICICI Bank, will now offer personal loans of up to Rs 15 lakh to its pre-selected salaried customers through its ATMs.  

After completing transactions such as cash withdrawal or checking balance, the customer will be asked if he needs a personal loan. Multiple loan amounts will be shown based on his eligibility. Next, the ATM will display interest rate, processing fee and EMI (equated monthly installment) amount. Finally, customer will have to give his consent for the terms and conditions of the loan and enter his debit card PIN to complete the transaction. Subsequently, money will be transferred into the customer’s account. Customers will be enlisted in the bank’s pre-approved customers list based on their CIBIL score.

According to experts, what sets this offering apart, is doing away with the need for any offline interaction. “There are banks that currently offer personal loans through the ATM. However, there is an element of offline interaction between the bank and the customer. This is the first time that the offline process has been done away in the context of ATM-based personal loans,” said Navin Chandani, chief business development officer, Bankbazaar.

Other experts said that banks, such as HDFC, have also been active in recent years in the sphere of pre-approved bank loans through ATM, internet and mobile banking. “By making instant pre-approved loans available through ATMs, banks can now target customers who are not internet savvy,” said Gaurav Aggarwal, associate director, unsecured Loans at Paisabazaar.com.

Banks have an advantage of giving instant, pre-approved loans to their own customers since they have their data on salary, average spending, etc. For customers who have availed of any credit in the past, they have the credit report and credit score of that customer. Based on all this information, the bank can quickly pre-approve customers for specific amounts.

Customers who don’t have a long relationship with a bank should try their luck with fintech companies for quick personal loans. “Fintech companies’ processes are better aligned for lending to new customers who don’t have a banking relationship,” says Satyam Kumar, co-founder, LoanTap.

Banks’ personal loans are available at around 13 per cent, NBFCs offer them at around 15 per cent, while fintech players offer them at around 18 per cent.      

Cost of a personal loan

Banks/NBFCs	Rate of interest
ICICI Bank	10.99% - 17.75%
State Bank of India (Xpress credit)	11.90% - 14.90%
HDFC Bank	11%  - 20%
Axis Bank	10.99%  - 24%
Citibank	11.49% - 18.99%
Bajaj Finserve	12.5% onwards
Yes Bank	11.5%  onwards
Kotak Bank	11.5% - 24%
Source: www.paisabazaar.com