Banks to charge a fee for retaining the booking deposits of Nano

A Tata Nano aspirant who does not get the allotment at the first phase is expected to pay an additional fee for retaining their booking deposits for the second phase. If an individual wants to extend his loan period to retain the booking deposit with Tata Motors then he will have to shell out a payment that is over and above the interest payment for the period.

Banks that are extending loans for the Nano are charging interest at a rate of 10% per annum on the booking price for a period of up to three months. These banks are further charging the same rate from the customers who could not get an allotment at the first phase and wish to retain the booking money for next level of allotment. Also the banks have decided on a zero processing fee for extending the booking period beyond the first phase.

However the actual rate that the customers need to pay is 1.5% as Tata Motors have decided to pay 8.5% a year for a retention period of 1-2 years. Tata is expected to roll out the second phase of allotment after one year but if starts the second wave of allotments within a year, then it may not pay the 8.5% interest.

Meanwhile the exclusive financer for the Nano, State Bank of India (SBI) did not commented on the matter. Others like UCO Bank and United Bank of India (UBI) have confirmed they will charge 10% per annum for the extension period. "We've decided to fix the rate at 10% even for the possible extended period of booking. We may again take the sum upfront from the customer," said an executive from UCO Bank.

Even Indian Bank has not taken any decision on the issue. "We plan to charge 10.5% interest for the initial period of booking. Although, we haven't thought on the possible rate for extending the Nano booking period, it is unlikely that the rate would get reduced from 10.5%," said a senior official at Indian Bank.

In case of a 10% interest rate, the base model of Nano for which the booking sum is fixed at Rs 95,000, one needs to pay a sum of about Rs 1,425 per annum for retaining the booking deposit. For the Nano CX and Nano LX models, the borrower would need to shell out Rs 1,800 and Rs 2,100 a year respectively as the additional fee.

Sorce: Rupee Times