Jolt for Ola & Uber as banks decide to stop disbursing loans to drivers

Jolt for Ola & Uber as banks decide to stop disbursing loans to drivers

BENGALURU: India's top lenders, alarmed by the rising tide of defaults on vehicle loans by drivers on ride-hailing apps, are applying brakes on fresh loan disbursals in certain cases and pushing to recover dues even as the once-speeding industry shifts to a lower gear to rein in costs. 

With nearly a fifth of its loan book in Bengaluru defaulting, State Bank of India has stopped vehicle loans to drivers plying cars for Ola in the city. The southern metropolis is the country's largest market for ride-hailing apps. 

"The total default amounts to Rs 60 crore in the city," said Gopal Krishan Kansal, chief general manager, small and medium enterprise, at State Bank of India in Mumbai, who decided to stop lending to drivers on the Ola network over the last few months. "We (still) disburse loans to Ola vehicles in Hyderabad and Chennai (where) the default rate is almost 7 per cent," said Kansal.