SBI extends credit period of stressed auto dealers

New Delhi: To help the auto sector tide over stress, the country's largest lender State Bank of India (SBI) has extended the credit period of automobile dealers that are facing demand slowdown and inventory build up.

"We are actively engaging with the auto dealers and in case of hardship faced by them the bank is extending credit repayment period on the case to case basis," SBI managing director (retail & digital banking) told reporters here on Sunday.

Normally the credit period is of 60 days but the bank has extended the same to 75 days in some cases or 90 days in others, he added.

As a bank, we can only focus on the financing side. Our main focus is make available funds at cheaper cost for those retail customers keen on buying cars. We also fund the dealers when they buy cars from the manufacturer. However, for the aspect of revival of demand, only government can step in," he said.

Gupta further said there has been a slight downturn in auto loans from the bank in recent months due to various reasons.

The auto sector is facing its worst crisis in two decades and reports suggest thousands of job losses in the automobile and ancillary industry.

Around two lakh jobs have been cut across automobile dealerships in India in the last three months, according to the Federation of Automobile Dealers Associations.