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Old 16th October 2008, 21:21   #31
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This is a great move by Tata,
Especially if the product is taken into context.

The other major car loan players ICICI, HDFC, Kotak Mahi are unfortunately city centric. Try taking a loan from any of them with a village based permanent address and 80% of the time the applicant will be categorised as a negative profile and have the loan rejected.

Also they mostly use DSAs (direct sales Agents) who are largely unregulated sales people. They will go to any measure possible in order to get the customer eg. misquoting interest rates, forging docs, excessive margins etc. Most times the interest rates are higher than what is levied by the parent bank in order to make space for dealership margins and their own pockets. Also they easily convince customers that the loan is on a diminishing scheme but actually is only a fixed rate loan wherein the interest charged is structured. Of course if you are careful with your paperwork one wont be tricked, but in most cases unsuspecting customers are busy bargaining vehicle discounts, accessories etc. and the dealer/financier combo hits back at them with the finance scheme.

A money order as a means of booking the car is a much better system (despite the charges) rather than putting up deposits with the dealers, considering the demand the car will have there is every chance that these customers will be taken for a ride with their hard earned cash. Why even a far more respected brand Honda have let their dealers play the upper hand with customers when it comes to booking the new City.

SBI has a far larger branch network, rather than being present only in the cities. This will help them avoid unecessary travel and time to process paperwork. Also the nationalised banks have a far more flexible method for verifying loans rather that just looking at IT statements and repayment history, a rural customer might struggle in both cases.

Also the recollection methods used by the private banks are legendary, from using local goons and thugs as recovery agents to public embarrasment, the lengths they are willing to go are shocking.

One cannot deny the sea change in the bank's attitude once private players came into the lending scene. processing a loan within 24 hrs. was unthinkable of a decade ago. Loan applicants were treated a customers instead of beggars. Kudos to ICICI and the lot for this. But this profit making greed has come around in a full circle. These nationalised banks do not have the aggressivenes of the private ones and perhaps in todays scenario, thats a safer option for a cuastomer.

This product was concieved by Ratan Tata for families who cant afford cars, the kind of families that perhaps fall out of the radar of the private banks. They wont have a city residence, IT statements, MNC jobs, but still aspire to own a car. Maybe its best for them to stick to the old school way of doing things rather than being trapped in the jaws of todays dealers/Financiers.
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Old 17th October 2008, 00:17   #32
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Default It's not all that bad.

It is nothing to raise a hue and cry about. TATA may be right. SBI has maximum reach in india.
Though their service leaves lot to be desired, they have good products to offer. Ask anyone about Private banks and how they behave if you face any issues, they are nothing better. For taking a loan you can bank Public banks, they are much less annoying than all the ICICI, Citibank and brothers from my experience.

I think its time to take US example for everything at least for now!! They are in pretty bad shape because of all those Free market Fundas.


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Old 17th October 2008, 00:52   #33
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It is quite amusing to see so much discussion happening about this issue. As some pointed reach must be one of the major criteria for deciding the partner. And most of the managers tend to have an idea about repaying capacity of the target segments, like if a farmer wants to purchase a car.

A single player would preferably provide more uniform rates all over the country. If this does not work out there is always the option of tying up with other players. And finally SBI is actually not as worse off as people seem to point out here. I have done some large transactions with pvt banks HDFC, citi and ICICI. They are a real pain to deal with. Once a bank did not even have 6 lakhs cash when I cancelled a DD. ( It was in one of the richest areas of the city). Public sector banks never seem to have these kind of issues.

Anyway waiting for the fully loaded Nano.
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Old 17th October 2008, 00:54   #34
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Now its even more surprising to see that most of you havent even grasped the issue! The issue is *NOT* about SBI having a rural footprint, or about its largest branch network, or about its recollection methods, or whatever else! The issue is about monopolies!! Even if Tata gave this right exclusively to HDFC or ICICI or Kotak or a scheduled co-op bank or whatever, it would be EQUALLY wrong!!

Let the customer choose!!!

It seems you guys dont like choices... or you prefer to let Mr. Tata make them for you...
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Old 17th October 2008, 01:03   #35
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Raccoon, Nobody said there's going to be a monopoly, The commentary is just on the tie up, One cannot prevent somebody from financing a Nano, if you go in with an ICICI cheque for the Nano they've got to sell you the car.

Whats being mentioned is the pros and cons of a tie up with SBI.
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Old 17th October 2008, 01:12   #36
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how come monopoly is a issue. If banks feel they can match or better SBI prices, they will devise ways to give loans to customers.

Banks can create an account with SBI and give you a DD from SBI (if only SBI cheques or DD's are accepted), but your car will be mortagaged to the bank issuing the loan as simple as that.

Free market will create loads of opportunities.

Last edited by indian21r : 17th October 2008 at 01:17. Reason: Typo
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Old 17th October 2008, 07:44   #37
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Nano is projected as amm-admi car. SBI is located in every nook and corner of India, including remote villages. So, may be that is one of the reason why TATA decided on something like this.
Lets wait and watch, it just couple of months from now.
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Old 17th October 2008, 09:17   #38
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I would reckon that this is more like a preferred-banking partner, between TATA and SBI. But saying that you can bank only with one entity is taking the competition out of the picture, which is not good!

Quote:
Originally Posted by mjothi View Post
...Lets wait and watch, it just couple of months from now.
The best thing to do.

OT:

Quote:
Originally Posted by shortbread View Post
... Loan applicants were treated a customers instead of beggars...
Errm... Guess you mean the other way - "... Loan applicants were treated as beggers instead of customers..."
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Old 17th October 2008, 09:29   #39
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that seems like win win situation for both the TATAs and SBI
nice business decision
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Old 17th October 2008, 09:43   #40
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Quote:
Originally Posted by sary View Post
Dude, this works sometimes... https://www.onlinesbi.com/

I hardly visit SBI, but all my transactions are at my finger tips. Get the free internet kit from them and forget tokens.

I also hold a Citi Bank account, most of Citi ATMs allow to deposit cash, and then do online funds transfer !

Quote:
Originally Posted by umvarma View Post
Hi RAC!

This is surprising. Which brach you are holding your account in? I was using SBI account for decades. I hold accounts in a small village in Andhra, and in IISc Brach in Bangalore. I am also having an account in ICICI bank. I found the transactions in SBI to much faster than the ICICI. I never stayed anything beyond 15mins in any SBI brach. I used to taken tokens about 6-7 years back. Not these days.

Regards,
Mohan.
Quote:
Originally Posted by anup7649 View Post
RAC,
Which branch are you talking about in Bangalore. I smell something fishy about your statement saying that 400 tokens were issued and the customers were walking out?
Guys, thanks to all for your advice but once again I just wrote about the crowd status at the SBI branch at my locality. It's nothing to do with my transactions.

@umvarma - Though I don't see anything wrong with it, i somehow am not comfortable naming the branch here. The branch just has way too many account holders and not enough staff and counters.

@anup7649 - dear friend. I fail to see the "fishy" part in my post. I have mentioned that I overheard the receptionist say that the tokens are not being issued since there are around 400 members in the queue. And then the account holders waiting to take the tokens started walking out of the bank.
The only part which could seem fishy is the number 400. And i hope you do not read too much between the lines. All I wanted to say was that, that particular branch is really overcrowded, beleive me.
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Old 17th October 2008, 12:25   #41
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Quote:
Originally Posted by shortbread View Post
Raccoon, Nobody said there's going to be a monopoly, The commentary is just on the tie up, One cannot prevent somebody from financing a Nano, if you go in with an ICICI cheque for the Nano they've got to sell you the car.
According to the article posted, Nano dealers would not accept an ICICI cheque.

Quote:
Originally Posted by HappyWheels View Post
As per the unique understanding, only SBI will provide car loan facility to Nano buyer across the country. Only SBI cheques will be accepted by the Nano dealers. Not only that, anyone who wants to buy without a loan also will have to issue demand draft of SBI in fa-vour of Tata Motors.
I'm guessing, that this setup could probably give SBI leeway to charge a premium fee (like a loan or DD 'processing' fee) on the Nano, and share part of the amount with Tatas.

If it really does turn out to be a monopoly then, its bad for customers.
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Old 17th October 2008, 12:59   #42
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I can understand the loans part of the understanding (if it is true).

But accept only cheques / DDs from SBI? That is surprising. First, what is loss to TM if they accept a DD / cheque from any bank? That is inviting problem from the banking ombudsman / restrictive trade practices commission. If govt. organisations do this (insist on DD / cheque from SBI) - it is with a good reason - the law.
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