SBI toughens lending norms for auto dealers: report

The State Bank of India has decided to narrow lending rules for auto industry dealers amid rise in shadow-banking crisis and growing liquidity crunch in NBFC sector, according to a report by Reuters. In an internal memo accessed by the agency, SBI is said to have cautioned stopping of lending to Hyundai dealers unless 25% collateral is provided. Further Hyundai dealers who have already received loans will have to provide security between 25-50% of the loan amount. Similar memos have been sent to auto dealers across all brands, the report said. India's largest lender will also monitor levels of inventory on a monthly basis to keep an eye on the dealers' financial health.