No car loan if annual income less than Rs. 6 lakh, says SBI

New Delhi, Sept 12: Individuals with annual income of less than Rs. 6 lakh will not get a car loan from State Bank of India (SBI) as the bank has tightened eligibility conditions for its four-wheeler loan scheme with a view to minimising possible defaults.

The eligibility limit for loan issuance to salaried individuals for car purchase has been raised from Rs. 2.5 lakh per annum to Rs. 6 lakh per annum, as per a recent circular by the bank. For SBI account holders, the limit has been raised to Rs. 4.5 lakh per annum.

SBI currently offers car loans at an interest rate of 10.45 per cent, as per the bank's website.

Giving the rationale for the increase in the eligibility criteria, a senior bank official said the decision to revise upwards the gross income limit is taken in view of the moderation in economy.

The official futher said that this is a preemptive step to ward off fresh slippages.

The bank's auto loan portfolio grew by 38.71 per cent to Rs. 26,411 crore at the end of first quarter of the current fiscal year as against Rs. 19,040 crore at the end of same quarter of the previous fiscal year.

Market share of the bank rose 2.91 per cent against 2.44 per cent in the same period last year.

Gross non-performing assets of the bank rose to 5.56 per cent as compared to 4.99 per cent at the end of the first quarter of 2012-13.

At the same time, net non-performing assets (NPAs) of the bank rose to 2.83 per cent as against 2.22 per cent at the end of June, 2013.

Snapping a nine-month streak of declines, domestic passenger car sales grew by 15.37 per cent to 1,33,486 units in August this year, compared to 1,15,705 units in the same month last year.

Industry body Society of Indian Automobile Manufacturers (SIAM), however, played down the feat saying the growth was mainly due to low base effect as a result of the month-long lockout last year at the Manesar plant of the country's largest car maker Maruti Suzuki India (MSI).

PTI