The 'Nano' phenomenon has opened up a new category of borrowers - somewhere between borrowers for two-wheeler loans and cars loans, say bankers reacting to the Tata car launch.

ICICI Bank, India's second largest bank, today launched a new Non-Resident Ordinary (NRO) deposit feature, NRO Fixed Deposit Plus (NRO FD). This new feature introduced by the Bank's NRI Services division will enable NRI's to maximize their post tax yield on NRO FDs.

To provide better banking and investment facilities to rural masses of the valley, Elaquai Dehati Bank (EDB) has tied-up with Reliance general insurance and ICICI prudential life insurance for distribution of their products. While speaking about the policies of the bank at the inaugural ceremony of first computerised branch of EDB at Wazir Bagh, Chairman EDB Ahmadullah Tak said "Although there are so many banking facilities available in our valley these days but surprisingly 60 percent of population do not have accounts in any of the banks and a large chunk of this population belong to rural areas.

Pune district consumer disputes redressal forum has ordered ICICI Bank to cough up Rs 1 lakh compensation to a woman for not following due legal procedure while seizing her car after alleged default in payment. The bank has been accused of sending recovery agents to housewife Renu Bhandwalkar's home and damaging her car.

The Delhi Consumer Commission fined ICICI bank a whopping fine of Rs 50 lakh for employing "goons" to recover loan and deplored the practice of the banks intimidating consumers to pay the installments.

Buying a car in these days has become a lot easier since there are plenty of lenders in the marketplace, ever willing to offer a car loan. So either you want to buy a new car or a used one, car loans are available with ease for any type of borrower.

ICICI Bank, India's second-biggest bank by assets, said second-quarter profit rose 33 percent as it earned more from car loans, home loan, personal loan and financial products in Asia's third-biggest economy.

ICICI Bank wants to teach banking to schoolchildren, in fact to anyone who wants to learn. And its main muse for this cause was the Reserve Bank of India, which has been exhorting banks to educate the public about the basics of banking. Hence, when ICICI asked for help, the RBI was more than willing to don the role of publisher and teacher for the cause.

ICICI Bank recently announced the introduction of floating rate car loan - a first among the banks that are very active in car loans.

Floating rate option till now was available only for the longer tenure home loans. But is it a viable option for the short tenure - 3 to 5 years - car loans?

First, let us look at the interest rate differential available between the floating rate and fixed rate car loan offered by ICICI Bank. The differential is only 50 basis points (100 basis points make 1 per cent). That is, if you can get a fixed rate car loan from ICICI Bank for 14 per cent, then if you are opting for a floating rate, you could get the loan for 13.5 per cent.

ICICI Bank has decided to offer floating rate loans to purchase cars and commercial vehicles.

It will be the first in the country to offer a floating rate repayment product for car loans, commercial vehicles, construction equipment and professional equipment loans.

The move is designed to attract customers at a time when interest rates have started showing signs of peaking out.

The private sector bank is the market leader in the car loan segment with a share of around 30 per cent. However, like others in the sector, ICICI Bank has seen fewer customers queueing up for car loans because of the high interest rates.

V Vaidyanathan, Retail Head, ICICI Bank, said, the bank has seen lower consumer demand across the board due to higher rates and supply side constraints. Auto demand is down to 12-13% while two wheelers have seen degrowth of 13%, he said.

He expects a 20% loan growth for banks in FY08 as against 28% last year. Vaidyanathan doesn't see an impact on bank margins going forward. "Growth of banks' balance sheets may get affected due to loan degrowth."

Vaidyanathan doesn't see lending rates coming down for the next 6-9 months. "RBI is still signaling a tighter monetary policy despite lower IIP numbers. Inflationary worries signal a flat interest rate scenario."

ICICI Bank announced a new initiative in its car loans segment called LOTS (loan on the spot) for its existing savings account customers.

Those aspiring to purchase a car under the new initiative of the bank need to have a savings bank account with the facility of a debit card to get the pre-approved offer from the bank.

ICICI Bank General Manager and head, retail assets, Rajiv Sabharwal said :''With the boom in the country's economy, there is a sudden spurt in the demand for new cars and hence we've launched this offer to facilitate our customers to have a car.

The bank has started the initiative in a few cities, namely Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Bangalore, Pune, Ahmedabad, Chandigarh and Jaipur at the moment, but would soon extend the offer to more than 20 cities.

ICICI Bank's Head of Car & Commercial Vehicle Loans N.R. Narayana said :''We have put separate swipe machines at the dealers' shops for the purpose for the time being to avoid confusion.'' However, the existing swipe machines are equipped with this facility, he added.

India's second-largest lender, ICICI Bank (ICBK.BO: Quote, Profile , Research), reported on Saturday a 25 percent rise in quarterly net profit, meeting forecasts and helped by growing demand for loans in the expanding economy.

"We do see a little slowdown there because of the interest rate where they are and the property prices being high," Chief Financial Officer, Vishakha Mulye said.

ICICI Bank, which had an overall credit growth of 35 percent, has seen a slowdown in its mortgage and auto loans business, she said.

Maruti Udyog Ltd., maker of half the cars sold in India, reported profit grew for a 16th consecutive quarter as it introduced new models.

ICICI Bank Ltd., India's largest lender, have tied up with the carmaker to offer loans to customers in towns and villages, where credit wasn't previously available, to boost vehicle sales

he carmaker, 54 percent owned by Suzuki, plans to invest as much as $2 billion by 2012 to produce new cars and expand capacity. That may help take on competition from minicars of General Motors and hatchbacks from Volkswagen AG and Nissan Motor Co.

Car loan offtake is facing a lull in March due to increase in interest rate by 1% and withdrawal of incentives like free insurance to buyers after the budget.

This is the first time in three years that the rate has been hiked by 1%. It was also hiked last year but only by 25 to 50 basis points (100 basis points = 1%).

"The market did not grow as per the expectations after budget but we expect it to improve by the month-end," sources in ICICI Bank said.

With ICICI Bank Car Loans, you can avail of Car Loans as well as Car Overdraft Loans as per your needs. Our eligibility criterion is given below for the two different types of loans as per your occupation.

Age Criteria :

->Salaried Individual :

The applicant should be atleast 21 years old at time of application, and below 60 years of age at time of maturity of the loan

->Self-Employed Individual :

Any Proprietor, partner, professional or director above 21 years of age but below 65 at the time of the loan's maturity

->Partnership Firm :

- - - -

->Private / Public Ltd Co :

Limited companies should have been in existence for at least 2 years

Income Criteria :

->Salaried Individual :

Gross annual salary above Rs 1 lakh p.a

->Self-Employed Individual :

Gross annual income above Rs 60,000

->Partnership Firm :

Firm should have a minimum PAT (profit after tax) income of Rs 60,000

->Private / Public Ltd Co :

Minimum PAT (profit after tax) of Rs 60,000

The impact of the Reserve Bank of India's credit policy 2007-08 is being felt across the board.

As speculated by market analysts, the deposit rates are set to come down, while in all likelihood the interest rates on loans would not come down from the present level.

India's largest private sector bank, ICICI Bank's CMD KV Kamath said the recent move by RBI to hike CRR won't slow the growth process. However, a reduction in the interest rates on loans is unlikely.

"The Bank doesn't see auto loan rates softening in the next 3 months," said Kamath.