OBC cuts interest rate on vehicle loan by 0.25%

Interest rate on commercial financing of four wheelers has been reduced to 12% from 12.25%

Days after Finance Ministry decided to infuse additional capital in public sector banks, Oriental Bank of Commerce today decided to cut interest rate on consumer durable and commercial vehicle loans by 0.25%.

 

Interest rate on commercial financing of four wheelers (Auto & Taxis) has been reduced to 12% from 12.25%, OBC said in a statement.

 

Similarly, personal loans and consumer durable loans has been reduced by 0.25% to 12.50% for government employees while for other employees it has been brought down to 13.50%.

 

The new rates would be effective from October 10, it added.

 

The bank is offering most attractive rate in the industry with car loans and two-wheelers loans at 10.75%  for repayment up to 3 years and 11% for repayment beyond 3 years, it said.

 

Last week, the government had decided to provide additional funds to the PSU banks to enable them extend more credit to auto and consumer durables sectors to stimulate demand and combat slowdown.

 

The decision to increase the quantum of capital infusion was taken at a meeting between Finance Minister P Chidambaram, RBI Governor Raghuram Rajan and Economic Affairs Secretary Arvind Mayaram.

 

"This amount (Rs 14,000 crore provided for capital infusion in Budget) will be enhanced sufficiently. The additional amount of capital will be provided to banks to enable them to lend to borrowers in selected sectors such as two-wheeler, consumer durables, etc at lower rates in order to stimulate demand," a finance ministry statement had said.

 

The additional fund infusion would help in combating slowdown and boost output, it had added.