New Delhi: The country's largest lender SBI on Wednesday said it is continuously reviewing its exposure to automobile dealers as well as individual loans and ensuring that the auto sector does not face any stress.
The clarification comes in the wake of reports that State Bank of India (SBI) is seeking to reduce its exposure to risk from a sector in the midst of a slowdown. SBI is one of the biggest credit providers to auto dealers and individuals (auto loans), the bank said in a statement.
"In view of the current slowdown in the auto sector, the bank is continuously reviewing its exposure to the sector," SBI said.
The bank said it is actively engaged with the auto majors, dealers and the industry associations such as the Federation of Automobile Dealers Associations (FADA).
The lender in consultation with auto majors has taken steps to provide support to the dealers for inventory funding to help them tide over the current phase.
"Responding to the recent downturn in the auto industry, we at SBI proactively got in touch with our customers, original equipment manufacturers (OEMs), dealers as well as their associations such as FADA for gaining insights into their issues and modifying our product suitably so as to ensure that the sector does not face any stress," the bank said.
It is committed to taking any further steps necessary in this regard, it added. The automobile industry in the country is currently growing through a prolonged slowdown.
Sales across segments have been dwindling month after month as compared with the year-ago period. Continuing the unprecedented slump in the automobile sector, domestic passenger vehicle (PV) sales in India declined for the eighth consecutive month in June, prompting the industry to seek concrete policy steps from the government to arrest de-growth and check job losses.
According to data released by the Society of Indian Automobile Manufacturers (SIAM) on June 10, all vehicle categories witnessed decline in sales last month.
PV sales dropped 17.54 per cent to 2,25,732 units in June 2019 as compared with 2,73,748 units in the year-ago period. Similarly, domestic car sales were down 24.97 per cent to 1,39,628 units as against 1,83,885 units in June 2018.