SBI CAR LOAN

SCHEME

Programme for Branch Managers

Eligibility
(i) Regular employees of State/Central Govt., Public
Sector Undertakings, corporations, private sector
companies, and reputed establishments.
(ii) Professionals,
SE,
Businessmen,
proprietary/Partnership Firms and Others
Who are Income tax assesses.
(iii) Personal engaged in Agriculture and allied
activities

Age Criteria : 21 -65 Years

Take over
Takeover of car loans will be considered selectively
where:
(a) the vehicle is not more than 2 years old
(b) it is a single ownership vehicle
(c) no insurance claim has been availed and
(d) the account of the borrower with the other bank is a
Standard Asset i.e. all repayments have been made as
per terms of sanction of the original financier.
(ii) The loan should be repaid within 7 years from the
date of the original purchase of the vehicle

Reimbursement
Reimbursement of costs of car purchased by
own sources:
We may also reimburse finance for the cars
purchased out of own funds which are not more
than 3 month old.

Income Criteria
i)

Salaried:

Net Annual Income of applicant and/or co-applicant if any, together should be Rs.
2,50,000/- p.a. and above. Income from other sources like bank interest/dividends of
listed Companies, rent, agriculture income can be added.
ii) Self-employed, Professionals, Proprietary/Partnership firms and Businessmen:

Net Profit or Gross Taxable income of Rs. 2,50,000/- p.a. as per ITR after adding
back depreciation and deducting repayment of all existing loans. Business Income
from other sources like bank interest/ dividends of listed Companies, rent, agriculture
income can be added.
iii) Agriculturists:

Net annual income of applicant and/or co applicant together to be Rs. 2, 50,000/-.

The Net Annual Income will be arrived at based on the nature of the activity, land
holding, cropping pattern, yield etc. in terms of clarification issued vide Circular No.
PB/AL/33 dated 29th March, 2011

Loan Amount
Maximum loan amount:

a)

For Salaried:
The maximum loan amount that can be granted would be restricted to 48
times the net monthly income of salaried persons (i.e., net of all deductions
including actual monthly tax deductions at source).

b)

For others:
Up to 4 times the Net Profit or Gross Taxable Income per annum as per ITR
after adding back depreciation and deducting repayment of all existing loans.
Regular income from all sources can be considered provided the sanctioning
authority is satisfied with the proof of income. Income of spouse, father, mother,
brother, sister, son and daughter may be included for arriving at the loan eligibility
(any one). The person whose income is included will join as a co-borrower. The
maximum number of applicants should be restricted to two.

EMI/NMI Ratio
Depends on the NAI
NAI

EMI/NMI Ratio

Upto Rs 5 Lacs

Not to Exceed 50%

> 5 lacs and upto 10 lacs

Not to Exceed 60%

> 10 Lacs

Not to Exceed 70%

Margin
15% of the total cost of the vehicle i.e. on road price.
The total cost of vehicle is inclusive of one time road tax,
octroi, registration, insurance and accessories.
The maximum cost of accessories should not exceed 5%
of the cost of vehicle or Rs. 25,000/-. whichever is less.
Any consumer offer or discounts announced by the
manufacturers and dealers should be reduced from the
on-road price of the vehicle.
The sanctioning authority will have the discretion to
reduce the margin by 5% where check off facility from a
reputed employer is available.

Repayment

Maximum 7 years for all categories of borrowers.

However, the repayment period will, in no case, exceed beyond 70 years of the age of the
borrower.

The customer will have option for payment in shorter duration.

The repayment should be fixed on the basis of equated installments, preferably with a check off
facility in the case of salaried persons.

Where check off facility is not available post-dated cheques should be obtained.

Under check off arrangement, an Irrevocable Letter of Authority, as per Annexure-Car II, is
required to be obtained from the borrower (employee) concerned and a letter of undertaking is to
be taken from the borrowers employer as per Annexure-Car III. In case of Govt. officers, who are
themselves the drawing and disbursing authorities and take car loans, a Letter of Undertaking on
the lines of Annexure- Car VIII need only be obtained.

Repayment for loans to self employed, professional and businessmen can be accepted from
Cheque drawn from their own or firms account after obtaining the firms mandate.

Wherever Electronic Clearing Service is available, the Bank may use the services for paperless
debit of installments. However six Cheques to cover the loan amount should be obtained from the
borrower.

Penal Interest
If the irregularity exceeds EMI, for a period of one
month, then the penal interest would be charged
@2% p.a. (over and above the applicable interest rate)
on the overdue amount for the period of default. If
part installment or part EMI remains overdue, then
penal interest would not be levied.
This provision has been made to avoid application of
penal interest on Personal Segment Loan accounts
where stipulated EMIs or installments are being paid
regularly by the borrowers.

Processing Fees
Processing fee will be recovered on the loan amount upfront as under:
i) When loans are sanctioned: 0.50% of the loan amount subject
to minimum of Rs. 1000/- and maximum of Rs. 10000/-.
ii) When loans are rejected: 25% of the Processing Fee will be
retained if the application is rejected after pre-sanction survey
subject to Minimum of Rs. 500/- and maximum of Rs. 2500/-.
iii) The General Manager of respective Network at the Circle can
reduce processing fee up to 50%, in car loan in respect of :a) Short term promotional drives;
b) Bulk finance with availability of check-off from reputed employers
c) For high value individual car loan cases
In case of the takeover of the car loans of Rs. 5 lakhs and above
from other banks/NBFCs the DGM (B & O) and Network Head can
give discretion to waive processing charges up to 50% and 100%
respectively.

Security

Hypothecation of vehicle and noting of

hypothecation charge in the books of R.T.O. No
other security is to be obtained.
Any other security including third party
guarantee should be obtained only when there is
a need for credit enhancement e.g. credit score
below threshold limit, or any other business
consideration

Insurance
The vehicle purchased is to be kept
comprehensively insured in the name of the
borrower for the market value or at least 10%
above the loan amount outstanding,
whichever is higher, and the Banks interest as
a hypothecatee should be noted in the
certificate of insurance and insurance policy. A
copy of this is to be retained with the loan
documents.

Credit Information Report & Risk Scoring Model

Branches/RACPCs will access the CIBIL data base, in a bid to
trace credit facilities, if any availed by such borrowers from
other banks. For car loans over Rs.5 lacs, at least two credit
agencies reports will be assessed as per the latest policy,
once the services of RBI certified CICs (Credit Information
Companies) made operational in the Circles.

Implementation of Risk Scoring Model:

The scoring model will be implemented as a credit decisionmaking tool and will strengthen the existing system of
sanction or rejection of loan applications. No loan will be
processed without application of Risk Scoring Model.

Documents
For Salaried Individuals :
i) Statement of Bank account of the borrower for last 6 months
ii) Proof of Identity: - (any one of the following) - Passport copy/ PAN Card/
Voters ID card/ Driving Licence etc.
iii) 2 passport size photographs of borrower
iv) Income Proof: - Latest salary slip with form 16.
v) Address Proof:- (any one of the following) -Ration card/Driving Licence
/Voters ID Card/Passport Copy/Telephone Bill/ Electricity Bill/Life Insurance
policy/ PAN Card.
vi) I.T. Returns/Form 16 for the last 2 years. ( It is not necessary to obtain both
I.T return and Form-16 from the applicant).

Relaxation may be permitted by obtaining ITR/Form 16 for 1 year by one

step higher sanctioning officer, provided they are satisfied about the
genuineness of source, amount and continuity of income and repayment
capacity of the borrower over the loan tenor. In all such cases the basis for
income verification should be properly recorded on the loan appraisal.

Documents
For Self Employed, Professionals , Proprietary/Partnership firms & Businessmen
i) Statement of Bank account of the borrower for last 6 months
ii) Proof of Identity: - (any one of the following) -Passport copy/PAN Card/ Voters ID
card/ Driving Licence etc.
iii) 2 passport size photographs of borrower
iv) Income Proof: - Latest ITR for 2 years
v) Address Proof: - (any one of the following) - Ration card/Driving licence/Voters ID
Card/Passport Copy/Telephone Bill/ Electricity Bill/Life Insurance policy/ PAN Card
vi) I.T. Returns/Form 16 for the last 2 years.
vii) Audited Balance sheet, P&L statement for 2 years, Shop & establishment act
certificate/sales tax certificate/SSI registered certificate/copy of partnership.

Relaxation may be permitted by obtaining ITR/Form 16 for 1 year by one step higher
sanctioning officer, provided they are satisfied about the genuineness of source,
amount and continuity of income and repayment capacity of the borrower over the
loan tenor. In all such cases the basis for income verification should be properly
recorded on the loan appraisal.

Thank You