The Federation of Automobile Dealers Associations (FADA) has searched the intervention of Reserve Bank of India against alleged delays by private banks when transferring the interest rate letters to buyers in the car.
In a letter to RBI governor Sanjay Malhotra, FADA also called for an evaluation of the Repo-rate Pass-Through repeats of private banks in the Auto-Loan portfolio and for issuing corrective guidelines to a uniform transmissions to automatic creditors.
“Under your leadership, the RBI has delivered the fastest series of policy speed reductions in its history, a clearly positive signal for the economy. Nevertheless, this benefit is not fully visible in the auto-retail sector. While the public sector banks pass on repo-rate cutbacks on cars, said many private costs delayed,” “delayed transmissions,” “” “” ” Fada-vice-vice-vice-vice-vice-vice-Vice-Sai Girid
To ensure that private banks also transmit the benefit of the tariff reductions, FADA urged the RBI to “monitor and force a strict, time -bound transfer of policy abnormalities in all banking institutions”.
It also suggested making periodic, public disclosure of the cost-of-fund calculations of banks to improve transparency.
FADA also asked the Central Bank to “carry out a targeted assessment of the Repo-rate pass-through delays of private banks in the Auto-Loan portfolio and corrective guidelines to guarantee a uniform, 100 percent transmission to car wages”.
The authority of the Automotive dealers insisted on the RBI to issue clear guidelines on all banks to guarantee a uniform application of MSME loan benefits to eligible car retail companies, claiming that in various cases, banks have not expanded preference results for MSME registration for MSME-RREGRAME.
The guidelines must also relate to the mandatory expansion of concessional credit rates, priority sector classification and improved access to MSME-linked support schedules and complaints rescue mechanisms, FADA said in the letter.
The association also called for the expansion of the Credit Guarantion Fund Trust for Micro and Small Enterprises (CGTMSE) to India’s Authetail Canal, and said that authorized dealers and workshops remain outside of his ambit.
It also called for re -calibrating risk weights and unlocking priority sector benefits, saying that “banks today assign a 100 percent risk weight to car loans that are considerably higher than the 40 percent used on home loans, although vehicles serve as easily realizable collateral”.
By reducing the risk weight on car financing, an estimated 20 percent growth in payouts in the next five years added, it added.
At the same time, tailor-made inventory and workshop financing schedules would strengthen the dealer-liquidity, ensure that showrooms and service centers have the working capital needed to meet the rising demand of the customer, the letter noted.
Note that direct stimulus spending by banks to front line dealer personnel undermine the dealer -autonomy, FADA said in the letter: “We therefore urge the RBI to immediately set all banks to discontinue direct payouts to employees of all the authorized rougtenings.
In his letter, FADA also attracted RBI’s attention to stimulating access to credit and EV financing, improved access to affordable credit, including lower interest rates for car loans in Tier-2/3 cities and rural regions, among others.
Published on July 26, 2025
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