Banking major, State Bank of India has reduced dealer financing rate by 50 basis points, besides waiver of mortgage charges on the home loans with effect from July 1, the day that also marks the foundation day of the institution.
Under this scheme, authorised dealers* will be availed short-term 'working capital loans' ranging from Rs 5 lakh to Rs 15 crore. The bank has waived mortgage charges amounting to Rs 15,000 on an average under the offer and will also provide the dealers with facilities like roaming current account and multi-city cheques under the offer.
The scheme is available only for the new dealers. The old customers of the bank can move into the new scheme only after the renewal of existing loan. Dealers engaging for availing this facility would be required to provide security backup (in form of fixed assets like property or fixed deposit amounts).
The scheme is valid till the end of this year (December 2009).
Commenting on the launch of scheme, BS Bhasin, CGM - SME, said, "The bank aims to increase its market share by offering this scheme. Currently, our market share is about 10%, and by December 2009, we plan to double it."
Presently, the SME portfolio of the company is around Rs 1-lakh crore, in which the share of dealer finance is about 10 percent. The bank also already entered into alliance with steel, automobile, and cement companies to avail their respective dealers, finance facilities at concessional rates.
Last week the bank lowered its lending rate, the State Bank Advance Rate (SBAR) by 50 basis point to 11.75 percent from the earlier 12 percent, with effect from June 29.
(* dealers authorised by manufacturing companies)