Auto loans are back in demand and showing robust growth
Demand for car loans has seen a strong increase from negative growth last year. According to data from the Reserve Bank of India, vehicle advances from commercial banks increased by 18% year-on-year at the end of June 2022. During the same period last year (June 2021), the disbursement of loans automobiles decreased by 3.5%.
“There was a drop in demand last year for various reasons and the negative economic impact of the Covid-19 pandemic as well as supply chain issues for automakers. But we now have a trend upward which is expected to continue,” a senior SBI official said. Activity area.
SBI and PNB see an increase in auto loans
For SBI, auto loans increased 10.5% in the first quarter ended June 2022 (5.84% in June 2021). According to Atul Kumar Goel, managing director and CEO of the Punjab National Bank, the preference given by many to travel on their own after the pandemic has been the engine of growth.
For PNB, vehicle loans increased by 34% in the first quarter of the current fiscal year compared to the same period last year. The car loan push has spread to nearly every major bank in the public and private sectors. For example, in the first quarter of the current fiscal year, ICICI Bank recorded a 17.6% growth in vehicle loans.
“The demand for loans for passenger vehicles is higher than that of the commercial vehicle segment, which is not yet recovering. The impact of the repo rate hike by the RBI should also be considered in the future,” said an economist from a major public sector bank. “Cumulative shipments of major passenger vehicle brands increased by about 30% last month compared to the previous month,” he said, adding that the trend could further increase demand for auto loans.
September 04, 2022