In view of growing inflation,which peaked to 12.75% ,the Reserve bank of India took some hard measures to curb liquidity of money supply.It increased CRR and repo rates. The banks have to park more money with the RBI.
Most banks have left the two wheeler industry in view of high interest rates as the lenders find it hard to collect EMIs from the customers.Earlier the private banks like ICICI had more dealers to loan arrangement for two wheeler segment.Now it has reduced its presence in the segment.
The automobile dealers demand 50% to 60% initial deposit to approve loans.
Customers are left with no choice but to wait until interest rates cool down.
But, the industry is hit and the sales are down already.
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