Mahindra & Mahindra group’s non- banking finance firm, M&M Financial Services, plans to increase lending rates by 0.50 per cent within next one month following RBI’s tight monetary policies that has made home and auto loans expensive.
According to Mr. Ramesh G Iyer, Managing Director, M&M Financial Services although they had not increased the interest rates, but there is a need to increase it by 50 basis points in about a month’s time. The increase would result in making auto, home and other loans costlier by 0.5 per cent but the possibility of demand for loans going down due to rise in interest rates will not come down. If demand of auto loans for new vehicles goes down, then it will increase for the second-hand cars.
About 60-65 per cent of M&M Financial Services’s lending goes to the customers opting for M&M’s products, of which auto loans constitute the major portion.
