An anonymous senior bank official of auto loan sector has said that this “pro-active step” was taken to raise the income requirements; but has raise signs of stress as well. He said, “We have noticed some delinquencies that have happened in the last six months. So we are taking this proactive step”, as quoted by ET.

He also said that the data obtained from various centers showed that there was a stress on repayments in car loan segment because of ever rising cost of living index, especially among those who are availing other loans as well. He added, “The first reaction is to default on auto loans as the interest rates are much lower than personal loans. Customers who are looking to migrate from two-wheelers to small cars should be earning enough to spare for a monthly payment of say, around 1,765 per lakh.

Whereas Financial Planners and Experts says that this decision of SBI is a correct move but also agrees that lot pf people might be affected by the rising living costs. “A lot of people underestimate their financial outgoes. Yes, they do not want to default but then the bank (SBI) must have seen some loans going bad,” said Naresh Pachisia, Managing Director of SKIP Securities.