Leading private lender ICICI Bank is said to have cut car loan rates to 9.75-10.5 per cent from 10.5-11.5 per cent. On the other hand, the bank has increased dealers’ commission to 2.25-3 per cent. If dealers pass on a part of these commissions to customers, the interest rate will further drop to 9 per cent for customers. ICICI’s new rates are 0.5-0.75 per cent lower than that of close rivals HDFC Bank and Axis Bank. “Our rates are in line with competition and payouts are at an average of 2%, also in line with competition,†said an ICICI Bank spokesperson. During lean times, there was a sharp drop in ICICI’s car loans; it came down to less than Rs. 50 cr a month from a peak of over Rs 1,000 cr a month. The rate cut will help the bank grab a larger share of auto loan market which is picking up on account of record level sales. People are showing renewed interest in buying a car as the recession is receding and many new small cars are being launched in India.
