Bank of Baroda cut its lending rate on loans by 25 basis points to 7.0 per cent to buy new car, seeking to push its retail loan book.
The state-owned lender’s new rate beginning at seven per cent for car loans would be linked to a borrower’s credit profile. The bank also announced a reduction in processing charges to a flat Rs 1,500 plus Good and Services Tax (GST), BOB said in a statement today.
The bank, in April, cut the lending rate for home loans by 25 basis points to 6.5 per cent till end of June 2022. This rate is available across all loans amounts and is linked to a borrower’s credit profile
This rate cut contrasts with lender decision to hike Marginal Cost of Funds Based Lending Rate (MCLR) by five basis points across different maturities from April 12, 2022 for increase in cost of funds. One year MCLR would be 7.35 per cent, up from 7.30 per cent.
The existing rate of interest for pre-owned cars and two-wheeler loans remains unchanged.
“The pandemic and subsequent lockdown impacted the auto segment, but there has been a steady rise in demand for car loans as the economy has opened up and people are keen to travel in their own vehicles,” said H T Solanki, General Manager – Mortgages & Other Retail Assets, Bank of Baroda.
Its auto loan book rose by 20.54 per cent Year on Year basis to Rs 23,384 crore by end of December 2022. Total retail loan portfolio was up 11.13 per cent to Rs 1,28,960 crore as of December 2021.