Car Loan - casualty of liquidity crunch? Have any of the new buyers encountered loan problems? Car loan? Forget it, they have no money- Auto Loans News-Auto Loans-Loan Centre-Personal Finance-The Economic Times
Extract of the news:
NEW DELHI: The liquidity crunch is wrenching the fun out of the festive season for both auto financiers and car companies. According to OEM sources, auto financiers have been left squealing from the liquidity squeeze, and disbursals have dropped sharply this month, particularly in the last 7-10 days.
Sources say, things got so bad that even sanctioned loans were not getting disbursed after Dussehra. It is learnt that Kotak and Reliance Capital are among those financiers that have cut back on disbursals. Carmakers say this is stifling even festival demand.
Reliance Consumer Finance (part of Reliance Capital) deputy CEO KV Srinivasan said: “The liquidity crunch has affected all sectors in the country and NBFCs, therefore, cannot be isolated from the situation. To counter this, we have taken a conservative view of the situation and have been selective in the current scenario. We are closely monitoring the situation and would review our stance at the appropriate time.”
Other big players have also been hit though in different ways. ICICI has been impacted by the shift to the floating rate of interest, with total auto business dropping by more than 50%. Even those like Tata Capital that are still reasonably active in the market are gasping for liquidity as they have had to raise money from the open market at exorbitant rates of 14-15%. Sources say NBFCs are simply not getting enough money from banks which is also affecting the disbursal rate. Tata Capital COO (retail finance) Shyam Mani said: “The market conditions are tight. We are chalking out viable options to fulfill the customers’ needs at best possible rates.”
Even those NBFCs that do not have any immediate fund crunch are cutting back on expansion plans and manpower growth in their consumer finance business. Recently, Cholamandalam DBS Finance announced it would close 75 out of its 260 branches in the personal loan business. Fullerton India, the NBFC arm of PE firm Temasek, is also revising its location and headcount expansion plans though a company spokesperson denied this. |