Taking a cue from RBI's rate cut yesterday, private sector HDFC Bank has decided to slash auto loan rates by upto 0.5 per cent.
The interest rate on car loan will be lower by 0.25 per cent while two-wheeler loan will be cheaper by 0.5 per cent, a senior bank official confirmed when contacted.
As far as the commercial vehicle segment is concerned, the reduction in rates will be 0.25 per cent.
The new rates would be effective from February 1, the official added.
Last month, the bank had reduced its base rate by 0.1 per cent to 9.7 per cent, the lowest in the market.
At the same time, the benchmark prime lending rate (BPLR) of the bank was also slashed by a similar margin to 18.20 per cent.
The revision in the benchmark lending rate was in anticipation of rate cut by the central bank in its January policy.
Yesterday, the RBI decided to reduce short-term lending rate by 0.25 per cent and slash Cash Reserve Bank (CRR) by same margin to inject Rs 18,000 crore of liquidity into the system.
Following the announcement by RBI, IDBI Bank reduced both its deposit and lending rates by 0.25 per cent while other banks including State Bank of India (SBI) hinted at cutting their interest rates within next few days.
The Mumbai-based HDFC Bank currently offers car loans between 10.75 per cent and 11.75 per cent. Post rate cut, the range would be 10.5-11.5 per cent for repayment period between 36 and 60 months.
Accordingly, interest rate on two-wheeler loans would be adjusted to between 19.25 per cent to 22.25 per cent.
With regard to commercial vehicles, the rate on heavy commercial vehicle will be down by 0.25 per cent to 11 per cent while light commercial vehicle will get reduced to 13.75 per cent from existing 14 per cent.
The auto loan portfolio of the bank currently stands at about Rs 33,000 crore. The auto loan advances of the bank has been witnessing a growth of 12 per cent.