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ICICI Bank has tied up with IndoStar Capital Finance Ltd (IndoStar) to finance purchase of used and new commercial vehicles (CV) by small and medium fleet owners.
“Under this partnership, IndoStar will originate and service the customers through the entire loan life-cycle, including sourcing, documentation, collection and loan servicing, while ICICI Bank will provide funding to these customers,” the bank said in a statement on Wednesday.
IndoStar, which has over 322 branches across the country and a niche in financing used commercial vehicles, will originate customers in tier-2, -3, -4 cities such as Coimbatore, Salem, Tirunelveli, Kurnool, Calicut, Thiruvananthapuram, Jabalpur, Bhopal, Ahmedabad, Rajkot, Jodhpur, Alwar and Meerut.
The partnership comes at a time when NBFCs are facing a liquidity squeeze post defaults by IL&FS and DHFL, and auto sales, including commercial vehicles, are witnessing a slowdown. A number of NBFCs are understood to be keen on such tie-ups to improve lending capacities.
“This combines the balance sheet strength of the bank with our ability to reach out to the under-served CV financing customers across the country’s smaller towns,”said R Sridhar, Executive Vice-chairman and CEO, IndoStar.
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