Uco Bank to sign agreement to offer loans for Nano

KOLKATA: Kolkata-based Uco Bank said it is going to sign an agreement with Tata Motors in order to offer loans to people planning to book Nano.

Bank chairman S K Goel said here on Friday that the agreement would be signed next week.

Uco Bank has also announced a car financing pact with Maruti Suzuki India on Friday to boost its auto loan business. The bank is also talking to a host of other auto makers including Bajaj Auto and Mahindra & Mahindra for financing agreements, Mr Goel said.

The bank has also slashed its benchmark prime lending rate (BPLR) by 50 basis points to 12% effective from April 1. Elaborating on the proposed agreement with Tata Motors, Mr Goel said Uco would offer loans to customers fully or partly for making the initial deposit for booking Nano. The bank would charge a 10% interest rate per annum on the loan. Customers would need to deposit Rs 95,000 for booking the basic model of Nano.

The bank would also convert the initial booking loan to a regular car loan if the customer gets allotment of Nano and seeks financing support for a longer term. The interest rate for the car loan then would depend upon the prevailing interest rates, Mr Goel said.

At present, the bank offers car loans at 11.75% a year. The rate stands reduced to 11% per annum in case a borrower offers full collateral security against the loan. Uco's car loans are linked to its BPLR and so the rates will fall from April 1.

People planning to take loans from Uco or, for that matter, any other Tata Motors preferred financiers, for booking Nano would need to submit the application forms to State Bank of India (SBI) which is Tata Motors exclusive partner for managing the entire booking process.

Tata Motors has earlier said that it has already entered into agreements with some 15 banks and NBFCs for the Tata Nano booking loan product. Customers will need to collect application forms from Tata Motors Passenger Car dealerships, SBI and its branches, subsidiaries and associates, other preferred financiers, and outlets of Westside, Croma,
World of Titan and Tata Indicom exclusive stores.