HDFC Bank lowers rates in auto loans in India

HDFC Bank, India’s leading private sector bank and the second largest private sector lender in India has reduced the interest rates on auto loans by half a percentage point. The bank’s decision to lower the rate is a direct reaction to RBI’s (Reserve Bank of India) lending rate cut of a quarter percentage point to 7.75 percent with the aim of reviving the economic growth in India.

The interest rates at HDFC Bank have been reduced by a quarter percentage point on cars and commercial vehicles while the two wheeler loans enjoy a reduction of half a percentage point. The new rates will come into effect from February 1, 2013.

According to industry experts, HDFC Bank is among the first banks to reduce the interest rates following the lending rate cut by RBI. Other banks are also expected to follow its lead and implement new reduced rates on loans.

The Indian automobile industry is likely to witness a slight respite due to the interest rate cut as it will lift car buyer sentiments. The high interest rates prevailing throughout 2012 has been a strong contributor to sluggish sales in the Indian car market.