SBI stall car loans for Ola and Uber

State Bank of India the largest lender of the country has started dealing with defaulters with iron hands. The bank has suspended car loans for Uber and Ola taxis across the country as several drivers failed to pay back loans of the bank.

The bank has already seized close to 300 cars of the loan defaulters. A whopping amount of 120 crore is at stake as most of the defaulters are in critical financial condition. The competition in the radio cab market surged in the last few years and biggies in this sector has snapped the incentives which further fractured the income of the drivers and pulled them into a critical financial condition, believe experts. 

A top honcho of the bank said, "“We have stopped financing vehicles under Ola and Uber (select geographies) as have we decided to take a cautious approach,”. 

He also added, "“Suspension is temporary because we want to watch the situation for some time. There have been certain changes in regulations in many geographies and it’s prudent to see how it evolves before financing these vehicles again.” 

Under Ola, SBI extended loans to Rs 60 crore (default around Rs 16 crore) and for Uber to Rs 70 crore. The bank is taking up the step for recovering the default amounts by putting the vehicles in the auction. Bank has seized around 300 cars out of which 80 are already auctioned and the remaining will be auctioned soon.