SBI not to give car loan to people with annual income of less than Rs 6 lakh

SBI not to give car loan to people with annual income of less than Rs 6 lakhIn a bid to minimise possible defaults on four-wheeler loans, State Bank of India (SBI) has announced its decision not to give car loans to those who earn less than Rs 6 lakh per annum.

Tightening eligibility conditions for its car loan schemes, SBI, the biggest state-owned lender of the country, said that it had raised the eligibility limit for four-wheeler loan issuance for salaried people from annual income of Rs 2.5 lakh to annual income of Rs 6 lakh.

However, for those who have an account with SBI, the limit has been hiked only to Rs 4.5 lakh per annum.

Defending the decision of hiking the limit, a senior official from the lender said that the decision was taken in view of persistent slowdown in the Indian economy.

SBI's auto loan portfolio jumped 38.71 per cent year-on-year to Rs 26,411 crore in the April-June quarter of the current financial year, from Rs 19,040 crore in the corresponding quarter of the previous financial year.

Defaults inflated the bank's gross non-performing assets (NPA) from 4.99 per cent at the end of June of FY2012-13 to 5.56 per cent at the end of June this financial year.