Now, book your Nano at UCO bank

UCO Bank recently signed a financing agreement with Tata Motors for the financing of the Nano, offering a special flexible scheme for the upfront booking fee.

"The amount payable to the company at the time of booking is Rs 95,000, and the bank would lend this money to the applicant at a less than 10 per cent interest," said S K Goel, chairman and managing director of UCO Bank.

He said the scheme offered by UCO was different from that of the State Bank of India, in the sense that UCO would lend any amount less than Rs 95,000 to the customer depending on their need.

For SBI, the upfront payment amount for booking was Rs 2,999, equal to the interest charged on Rs 95,000 for three months.

UCO was yet to finalise the number of branches that would act as booking counters for the Nano. Sources at the bank indicated that several hundred branches would be involved.

Meanwhile, more than 1,350 SBI branches located in 850 cities would assist in the booking process for the Nano. SBI would be charging around 11.75-12 per cent for financing the world's cheapest car.

An applicant with a car allotment would have to approach the bank separately for an automobile loan to be charged at the current rate of interest. The current interest rate on auto loans was 11.5 per cent.

"If full collateral security is provided on the entire loan amount, then there is a further rebate of 0.5 per cent," Goel said.

If the applicant did not get an allotment, Tata Motors would refund the money to the bank, and the bank will refund 10 per cent of the interest amount paid upfront.

Goel announced that UCO may sign an auto-loan financing agreement with Hyundai Motors India Ltd in the coming two weeks.

It also signed a memorandum of understanding with Maruti Suzuki India Ltd on Monday to offer car loans for Maruti cars at the company's dealerships as well as UCO Bank branches. MSIL would offer discounts in the range of Rs 3,000-Rs 5,000 depending on the model to UCO Bank customers.

The net auto loan portfolio of the bank is Rs 5,600 crore (Rs 56 billion) at present.