The Hindu Business Line : HDFC Bank may lower auto loan exposure in some States

Kolkata, Dec. 27 HDFC Bank might lower its auto loan exposure in markets such as Delhi, Kerala and Uttar Pradesh following the State governments’ stand on repossession of vehicles in these regions, Mr V.S. Ashok Khanna, the bank’s Executive Vice-President and Business Head, Car and Two Wheeler Loans, told Business Line here.

“The Delhi police has issued directives asking customers having any complaints against recovery agents or collection agencies to call them on a toll free number. We are talking to the individual state governments; in case there is no change in policy, we will have to control our exposure in places like Delhi, Kerala and Uttar Pradesh,” Mr Khanna said.

The recovery norms and the strict clause on collection procedures have made the job of banks very difficult. There is apprehension among financiers which has made them wary of lending, he added.

Slowdown

There has been a slowdown or even negative growth in the vehicle finance industry so far this year. These measures would lead to a further slowdown in the industry, he pointed out.

“There has been a slight increase in delinquency but it is not a cause of concern for banks. But what is more worrying is that such policies can turn customers paying their instalments on time into wilful defaulters. I anticipate further slowdown in the vehicle finance industry in 2009-2010,” he said.

According to recent estimates by Crisil, the vehicle finance industry is estimated to register a negative growth of around 15 per cent in 2008-09, as against a Compounded Annual Growth Rate of 18 per cent recorded between 2002-03 and 2007-08.

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