Tata Motors has signed an MoU with the State Bank of India to provide affordable finance schemes for its prospective customers for small and light commercial vehicles. As part of the collaboration, the country’s largest commercial vehicle manufacturer will leverage the reach of SBI in rural areas to push its vehicle sales.
Through this partnership, the two business entities will exercise SBI’s Contactless Lending Platform technology to ensure uniformity, transparency and a reduced turnaround time in the loan approval process, the Mumbai based company said in a statement.
Sales of commercial vehicles have been declining since 2018 when the union government introduced the revised axle norms which enhanced the load carrying capacity of trucks. Subsequently, the economic slowdown triggered by the bankruptcy of IL&FS and the covid-19 pandemic further impacted demand for such vehicles.
Since 2019, buyers of light and small commercial vehicles could not get access to credit from banks at affordable rates as banks started to tighten the credit disbursal norms. Hence, many of them deferred purchase of vehicles. With this collaboration the company wants to ensure that its customers don’t face the same situation at time when sales are gradually recovering after two years.
“With a pan-India reach and more than 22,000 branches, SBI has an extensive network across the country, and through this partnership we hope to strengthen our reach, especially in rural areas, aiding employment as well as providing unique and innovative financial assistance to our customers. We remain confident that through our collaboration, we will leverage our common strengths, and continue to serve our customers with dedication and zeal,” said Girish Wagh, president, Commercial Vehicles Business Unit, Tata Motors.
According to Tata Motors, this collaboration with SBI will allow its commercial vehicle customers to avail loans in a hassle-free manner as well as access SBI’s unique technology-laden offerings. This partnership will introduce easy loan structured schemes which will help mitigate the cost difference between the BS4 and the BS6 vehicles for both, down payment as well as the EMI of the vehicle.
“We look forward to leveraging this mutually benefitting collaboration and offer some unique financial services to CV customers and dealers across India. Through our innovative Contactless Lending Platform technology, we hope to further amplify the banking experience of customers and strive to extend a 360-degree benefit to retailers,” said C. S. Setty, managing director, Retail and Digital Banking, State Bank of India.