SBI to Offer Green Car Loans to Boost EV Adoption

SBI to Offer Green Car Loans to Boost EV Adoption

There has been a buzz of excitement and hope across the automotive industry since the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) II scheme announcement happened in March 2019. There is no denying the fact that the scheme will not only fast-track the electric vehicle ecosystem, as Cabinet Committee of Economic Affairs (CCEA) has given a boost to the government’s ambitious FAME project by approving a Rs 10,000 crore package for the second phase of the policy over the next three years till March 2022. The government also plans to support 10 lakh electric two-wheelers, 5 lakh electric three-wheelers, 55,000 electric four-wheelers and 7,000 buses under the new scheme.

State Bank of India has lately announced a discount of 20 basis points on the auto loan requests for buying of electric vehicles and has also waived off all processing fees for the first six months of loan tenure. Additionally, the Green Car Loan applicants will also be allowed for a relatively longer repayment (eight years) period against the standard auto loans (seven years in case of SBI). According to the bank, the move is in line with the government's target of getting up to 30 % electric vehicles on road by 2030. As per the new loan tenure, the EMI per lakh will be lower at Rs 1,468 for 96 months against Rs 1,622 for 84 months. 

P K Gupta, Managing Director, Retail and Digital Banking, SBI said Green car loan will encourage customers to adopt electric vehicles and help in reducing carbon emissions and improve air quality.   

According to Society of Indian Automobile Manufacturers data, where the electric car sales posted a slump to 1,200 units in FY18, down from 2,000 units an year ago, electric scooters sales doubled in the same period to reach 54,800 units at FY18 end. FAME II will have a precise focus on electrification of both shared and public transport and there will also be incentives for an operational expenditure model for e-buses by state transport corporations. Such incentives will only be applicable for three and four-wheelers plying as CVs and public transport, with the incentives applicable for private two-wheeler vehicles that use advanced battery packs made of lithium ion. Under phase 1, around 2,65,335 electric/hybrid vehicles were supported and the phase two will focus only on public transport rather than private car manufacturers.