SBI looking to extend credit period for auto dealers

State Bank of India is in active talks with automobile dealers to provide solutions for their current financial hardships over inventory build-ups arising from demand slowdown in the automobile sector, a top official said.

“We are talking to each dealer. We also had meetings with the Federation of Auto Dealers. We are actively engaged with all of them. On a case-to-case basis, whichever dealer has faced any problem on account of excess inventories, we have been working out solutions for all of them,” said PK Gupta, Managing Director-Retail & Digital Banking, SBI,  here on Sunday.

He was responding to a query on the steps SBI was taking to tackle the current slowdown in the automobile sector.

Gupta said that SBI was looking at extending the credit period for those auto dealers faced with inventory build-up due to poor demand.

“As a bank, we can only focus on the financing side. Our main focus is make available funds at cheaper cost for those retail customers keen on buying cars. We also fund the dealers when they buy the cars from the manufacturer. However, for the aspect of revival of demand, only government can step in,” he said. Gupta said there has been a “little bit of downturn” in auto loans from the bank in recent months. He, however, expressed confidence that the economy would recover in the coming days, especially with the government spending on infrastructure.

Asked if bank managers were apprehensive in handing out auto loans in the wake of slowdown, Gupta replied in the negative. “As long as the credit proposals meet our underwriting standards, the branch managers cannot say ‘no’ to any loan,” he said.

Meanwhile, speaking of the two-day ‘Ideas Conclave’ that the SBI top management held with bank managers across the country, Gupta said this was the first stage of the bottom-up consultative process of the bank.

Commenting on the outcome of the meeting held for 37 regional business offices at 30 centres under the Delhi circle, Gupta said that the discussion helped in simplifying the processes and fine tuning the products.

“We have got several ideas from our branch managers. One such idea is how we could further smoothen the sanctioning process for 59-minutes-loan that is now available for MSMEs,” he said.

SBI will now look to see if it could convert the in-principle sanction to regular sanction in seven days and also ensure that loans get disbursed within 8-10 days after the in-principle sanction.

Gupta also said that one other idea that came up at the meeting was improving the features of the ‘SBI YONO Krishi’ App. In the next two months, SBI plans to add new features like mandi prices and weather situation into this App, to provide more information to farmers, he said.

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