In order to boost sales of the ailing automobile sector, banks and financial institutions in the country are joining hands with car manufacturers and thereby promoting their vehicles.
For instance Corporation Bank and the Central Bank of India have tied up with Tata Motors so as to distribute the car loans for the latter's vehicle. The banks are offering loans up to 85% of the on road price of the car.
Corporation Bank is extending the loan for the term up to five years and Central Bank is offering the same loan for the tenure of seven years.
Corporation Bank is giving the loan at 11.75% per annum through all its 1,073 branches spread across the nation. Besides, the loan is also available at 329 sales touch points of Tata motors.
At the same time, Central Bank of India is offering Tata customers an interest rate of 10.5% per annum for 36 months tenure and 11.5% for above 36 months tenure. Even Central Bank is distributing the loan through all its 3,500 branches and 329 sales touch points of Tata motors.
Tata Motors feel that the agreement with PSU banks will help the buying process for its customers. The automaker also signed a deal with State Bank of India for financing its latest Rs 1 lakh car, Tata Nano.
Besides Tata, there are other automakers that are signing pact with the PSU banks to promote their vehicles. Recently even PNB has tied up with Hyundai to distribute auto loans to the customers of Hyundai.