HDFC Bank to disburse loans in nano seconds

Loans will be offered as a top-up on existing car or two wheeler loans

HDFC Bank, India’s second-largest private lender, is gearing up to disburse loans in nano seconds. The bank's customers alone can avail of these loans, to be offered as a top-up on existing car/two-wheeler loans.

“The nano-second loan will be quick money for the customer. If you have a car financed by us, you get an offer that will flash on your cell phone. You could log in via internet banking or mobile banking. It is a pre-populated application form; so, you only have to click on ‘yes’ at about five places and the loan will be disbursed in nano seconds,” said an official involved in the process.

The top-up on auto loans will be available only if a customer has paid equated monthly instalments on existing loan without a single default.

Such loans will also serve as an alternative to personal loans. Though the rate of interest will be higher than auto loans, it is expected to be less than personal loans. Currently, the interest on car loans is 11.5-13.7 per cent, while for two-wheeler loans, it is 11.75-24.08 per cent. For personal loans, the interest is 11.5-20.51 per cent.

As of March-end this year, the bank’s overall retail advances stood at Rs 2,25,694 crore, which increased to Rs 2,38,859 crore at the end of June. For the June quarter, auto loans accounted for the largest share, at Rs 50,100 crore.

Sources say HDFC Bank is believed to have a 32 per cent share in the car loans market and up to 23 per cent in two-wheeler loans. The new initiative is part of the bank’s strategy to transform itself into a digital bank. Earlier, the lender had launched applications for disbursing personal loans under 10 seconds and auto loans within 30 minutes, through biometrics devices.

In FY15, about 63% of the total transactions were carried out on internet and mobile compared to 55% transaction via the digital medium in FY14.