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An increased focus on using technology for loan approval and disbursal is in line with the bank’s aim to become digitised in the future
HDFC Bank, second largest private sector lender in the country, will use biometrics technology to disburse automobile loans in 30 minutes.
Earlier, the lender, whose loan book mostly consists of retail loans, had launched a loan product to disburse personal loans in 10 seconds.
The biometrics technology will be linked to applicants’ Aadhaar card number, which will pull out the customer profile.
The loan will then be approved with additional details. The product is available for HDFC Bank’s depositors, as well as others.
With this technology, loans for two-wheelers can be approved within 10-15 minutes, whereas the time taken for car loans will be around 30 minutes.
“We believe this will be the next level in financing and addressing customer needs. . . If a customer walks in to a dealer, they can walk out with the vehicle the same day itself, which was not the case earlier.
"In competitive times like this, you need products that will give you a one-up,” said Ashok Khanna, senior executive vice-president, business head (vehicle loans).
The lender has already deployed the biometric device across 60 two-wheeler dealerships and 200 car dealerships.
By accessing a customer's fingerprint record, the lender can get the data linked to his or her Aadhaar card. After this, the bank will seek additional details such as income and job profile to check the loan eligibility.
Once this is over, the loan can be approved. After submitting the documents and paying the margin money (over and above the loan), the customer can walk out with the vehicle.
The bank is planning to deploy this technology in 400-500 dealers across the country in the case of two-wheelers in the current financial year. In the same period, the target is to cover 300-400 car dealers.
In the past two months, the lender has disbursed about 25,000 car and two-wheeler loans with this technology.
Khanna said, HDFC Bank has 31-32 per cent market share in the car loan segment, and 22-23 per cent in the two-wheeler segment. With this technology, the bank is confident of wresting more market share.
Currently, the device has been deployed in dealership across urban areas. Going ahead, the bank plans to deploy it in semi-urban and rural areas, to expand the market in these.
Within the retail segment, auto loans make for the largest share with advances worth Rs 46,760 crore at the end of March. In FY15, the total retail advances stood at Rs 1,75,801 crore.
This increased focus on using technology for speedy loan approval and disbursal is in line with the bank’s focus on the digital medium and with an aim to become a ‘digital bank’.
According to Reserve Bank of India data, HDFC Bank recorded transactions worth Rs 6,031 crore at the end of March. The total value of transactions on the mobile banking platform in the sector stood at Rs 16,914 crore.
