For car loans, the State Bank of India (SBI) has introduced interest rate of 8% per annum fixed for the 1st year and 10% per annum fixed rate for the 2nd and the 3rd years. From the 4th year, the interest rate will be reset to the normal car loan rates. 



The decision to reduce the rate was taken on 21.06.2009 and was implemented from 01.07.2009. 



State Bank Advance Rate (SBAR) has been revised downwards by 50 bps from 12.25% p.a- to 11.75% p.a. with effect from the 29th June, 2009. The revised rates SBAR is applicable to all new as well as existing advances, including existing term loans (other than existing fixed interest rate loans). In addition, interest rates have been reduced for home loans @ 8% per annum fixed for the first year. The SBI is also offering reduced interest rates on SME loans. 



This information was given by Minister of State for Finance, Shri Namo Narain Meena in written reply to a question raised in Rajya Sabha today. 

I feel that the Government should step in and direct the private sector banks to reduce the rate of interest on credit cards too. At present a whopping 35-40 % is charged. 

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