Tata ties up with PSU banks for Tata Nano car loans

Tata motors has tied up with public sector banks (PSUs) in order to make inroads into the rural market in India.

Most of the PSU banks have significant penetration  in the tier 1 and tier 2 towns.

The tie-ups are not just for the Tata Nano but for the entire range of Tata cars.

The company has tied up with PSU banks like Corporation bank and the Central bank of India to provide car loans to customers. The banks will provide almost 85% of the on-road price of the car.

These PSU banks will provide finance schemes not just at their respective branches but also at Tata Motors’ 329 sales touch points across the country.

The Corporation bank will provide the loan for a tenure of five years and the Central bank of India will provide the same amount for over the span of seven years.

The Corporation Bank will offer loans across all its 1,073 branches and 329 sales touch points of Tata motors at a competitive interest rate of 11.75 per cent per annum.

The Central Bank of India will offer loans for Tata customers, from its 3,500 branches and 329 sales touch points of Tata motors, at an interest of 10.5% for a tenure of 36 months and 11.5% for a tenure of above 36 months.

Apart from these two banks, Tata Motors has also tied up with Punjab National Bank (PNB) for financing its entire range of passenger cars. The bank will offer loans up to 90% of the road price of the car over a period of seven years at an interest of 10.5% -11%. It may be noted that PNB has a pan-India presence with about 4,604 branches, including extension counters spread all over the country.

Tata Motors has tied up with the State Bank of India, but no details are available at the moment.

The Chief Manager of SBI, Jayanta Kumar Sinha, said on March 6, 2009, “SBI has been selected as the sole booking agent for Nano.”

However, he refused to reveal any details of the deal between SBI and Tata, and said that an official announcement will be made in the near future.