Vehicle loan demand continues to surge in Q3

As per the numbers of major banks for the quarter ended December 31, 2023, there was a strong double-digit growth in vehicle advances, also indicated by the Reserve Bank of India (RBI) data. 

“This festive season, especially in the third quarter during October - November 2023, witnessed sustained interest among new vehicle buyers, which actually began from the first quarter of the current fiscal year itself,” a senior SBI official told businessline . 

“The repayments have been healthy which is also encouraging bankers to lend aggressively as they are secured loans,’‘ he added.

For the State Bank of India (SBI), auto loans showed a 21 per cent year-on-year growth in the third quarter of the current fiscal at ₹1,13,118 crore (outstanding) with a comfortable level of Gross Non-Performing Assets (GNPAs) at 0.43 per cent.

A similar trend is also seen in some other major bank’s businesses too in the December quarter - 26 per cent for Punjab National Bank, 46 per cent for India Bank and 19.6 per cent for ICICI Bank.

According to a senior economist with a private bank, ease of processing and digital offerings also boost banks’ auto loan portfolios .

ICICI Bank, for instance, has an instant car loan disbursement, an industry-first proposition, for pre-approved customers; delivery order is generated digitally in a seamless manner.

HDFC Bank, too, is offering an entirely digitally-driven process for new auto loans. It also offers an instant top-up loan facility where loans are credited to the account in less than 10 minutes after one applies on the mobile handset