[JayPrashanth]

Originally Posted by Red Color Lover

This is shameful. The bank and the government are following a discriminatory policy. An individual can have other sources of income to buy a car.

If one has the income, it's fantastic. The bank is only asking you to furnish the proof of the same no? So, what's discriminatory in this?

Cheers,

Jay

[noopster]

It's quite reasonable. The article talks about total family income exceeding 50,000 a month which I think is perfectly fine. Normal household expenses, rent & utilities usually amount to at least 20-25K a month in a city like Pune, and that's just a conservative estimate. People who buy any product on EMI basis need to prove they are capable of repaying it else why will the bank disburse?

[TheG2]

Originally Posted by livyodream

Its not true. Have you applied for auto loan in SBI? The reason being these reviews are based on the word "Government" Bank. 90% of them never even approach.

Agree totally with livyodream. The perception created about public sector banks, companies is what makes people stay away from them. For which we can't blame the people. It's the companies that need to be blamed for their attitude over the years. Remember MTNL?

But now things have changed and SBI seems to be the best bet at the moment for loans whether it's car loan or even home loan. The worst or should I say over conscious of the lot is ICICI. Too much paperwork and highest service charge.

Yes incase of SBI, you can't expect a ever ready customer service executive looking after your request on priority but most of the times it is not needed.

Best,

[Farukh]

Will this be applicable if I'm to shift my loan from a private bank to SBI? I'm guessing it should. But the article doesn't really talk about it.

This had to happen just when I was thinking of approaching SBI.

[MaxTorque]

If we think from Bank's perspective, the decision will drastically improve asset quality of the Bank. By the way the income is collective income of the family.

I am more concerned about the way they have increased the processing charges. Earlier it was Rs.500 (IIRC) and now they hiked it to 0.51% of the car value.

[SkyWalker]

I find this to be reasonable. An average car starts with 3L onwards, these days. If nothing else, its good money management for the individual.

[Inquisitive]

I find this unreasonable to blame SBI just because they happen to be government controlled. My loan experience with them has been superb to say the least. They do indeed send their marketing team to your home and let you know beforehand what documents they need. At least in Kolkata, you just have to spend 10 minutes in their central loan processing office to sign on the document and thats it. At least for car loans they had already done away with individual branch manager's decision and implemented centralized decision for uniformity.
Secondly if the NPA of the bank increases aren't we be in unison to declare that that is because of their collusion with defaulters? I feel safety norms while disbursing loans should be implemented for all types of loans, not only the car loans. If that approach brings profitability to the institution, they should be commended. Otherwise, it is hypocritical in our part to blame them both for non-profitability and at the same time for ensuring they get better returns for their invested money. At the end of the day, if government makes profits, it is good for all citizens.

[ifly]

I went to the SBI bank today and they said they are not aware of it. The only source he said was the media and they hadn't received any memo from the bank.

Perhaps the media barking up the wrong tree gentlemen?

[mroptimist]

Originally Posted by ifly

I went to the SBI bank today and they said they are not aware of it. The only source he said was the media and they hadn't received any memo from the bank.

Perhaps the media barking up the wrong tree gentlemen?

It is very clearly mentioned in SBI website http://www.sbi.co.in/user.htm.

Here is the snapshot

[::CMS::]

This is my first post in TBHP.
IMO, SBI is doing right considering the present situation. The dollar rate has direct implications with the amount of floating money in the market. By giving loans, that money will be parked for 3-7 years, causing a money crunch in the market that can make the matter worse. Moreover, they have to reduce the amount of non-performing loans and cannot simply write-off those loans as before.

[ajitkommini]

I'm sure every bank or financial institution would have their own system of controls or criteria like this. But probably its only one parameter that feeds into their risk management system.

[katchkamalesh]

I hope that SBI does not carry this trend with the home loan and come about with a rule stating that the monthly combined family income should be more than a lakh or two.

I have been going through various posts and people tend to generalize the population based on their lives or based on their experiences of people surrounding them.

I am not trying to be rude to anyone here, as someone pointed out there are people who manage to live in Chennai with 10,000/month income and people struggling with 50,000/month income. It depends on the individual being a spend thrift or a person inclined towards saving for the future.
Thumb rule of banks is that one person must have sufficient income to manage his expenses.

When a person applies for a loan, his/her commitments or EMIs are deducted from the take home salary. The criteria is that now the (total-deducted) amount must not be less than XX% of his take home salary. XX% might vary from bank to bank and this represents the cost of living of that individual.

For eg. A earns 20,000/month and applies for a personal/Auto loan. His commitments/EMIs (TV, other loans) are 8,000/Month. Now his total available disposable income is 12,000/month which is ~60%. Hence he would not be eligible for a loan because he has his own household expenses to take care of.

In case, he has no commitments then he would be able to pay an EMI of 8,000/month.

[ifly]

Originally Posted by mroptimist

It is very clearly mentioned in SBI website http://www.sbi.co.in/user.htm.

Here is the snapshot

Hey thanks!
I just applied for a car loan with SBI and that's what the guys over at the branch told me... But it's documented in their website.

Appreciate you take the trouble to putting up the screenshot

[pahwa]

Well, SBI has just put this in black & white. I do not think anyone in metro or Tier 1 cities would most probably go for a car if the annual CTC is under 6 lacs. Post taxes, PF etc the net in-hand income at 6 lacs CTC would be around 35-40k and considering housing prices and rents, dont think someone can afford more than 4-5k at max for car EMI.

[MaxTorque]

Anyway it's SBI's choice to whom they should lend. But the problem will be, according to the bank, what are all the component of the salary will be considered as salary/income? I think many companies give benefits that are not in the form of money but as coupons/vouchers etc. We need to study the fine prints.