People with annual income of less than Rs 600,000 will not get a car loan from SBI as the bank has tightened eligibility conditions for its four-wheeler loan scheme with a view to minimising possible defaults.
The eligibility for loan issuance for salaried individual for car purchase has been raised from Rs 250,000 per annum to Rs 600,000 per annum, as per the recent circular of the bank.
For the SBI account holder, the limit has been raised to Rs 450,000 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 increase in the eligibility criteria, a senior bank official said the decision to revise upwards the gross income limit is taken in view of moderation in economy.
Economic condition has bearing on the repayment capacity of the borrowers, the official said, adding, this is 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 as against Rs 19,040 crore (Rs 190.4 billion) at the end of same quarter of the previous fiscal.
Thus, the market share of the bank rose 2.91 per cent against 2.44 per cent in the same period a year ago.
Gross non-performing assets of the bank rose to 5.56 per cent as compared to 4.99 per cent at the end of first quarter of 2012-13.
At the same time, the net non-performing assets 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 decline, 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, 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 country's largest car maker Maruti Suzuki India Manesar plant.