MUMBAI: The government’s outreach programme to ensure easier availability of auto finance boosted loan disbursal in the passenger vehicle segment in the October-December festive season of 2019, data shows.Vehicle loan disbursal by banks more than doubled in the October-December quarter of 2019 from a year ago after the government announced an outreach programme at the district level across the country.An analysis of Reserve Bank of India (RBI) data shows that banks offered Rs 10,155 crore in loans in the December quarter compared with Rs 3,833 crore in the same period a year ago, and Rs 1,292 crore in the April-September period of 2019. These loans are typically for buying two-wheelers, cars and small utility vehicles.With easy availability of finance, registration of two-wheelers and cars in October and November had broken into green, before slipping back into the red in December.Shashank Srivastava, ED, sales and marketing, Maruti Suzuki, said there is a significant change in the attitude of banks towards customers. Better finance availability was one of the key factors in helping the company deliver close to half a million vehicles in the October to December period of 2019. Maruti Suzuki had retailed about 600,000 units in the previous six months.“Banks and NBFCs reduced the lending rates, even the rejection rates had gone down. Even the finance penetration saw an increase to 79.1% at the end of December 2019,” Srivastava said.PB Balaji, chief financial officer at Tata Motors , said banking channel liquidity has improved significantly and that bank disbursement has picked up in the last six months, as the comfort for lenders improved after the company cleared apprehensions. “The disbursement of loans for the BS-VI vehicle may not be a hurdle for the lenders. However, financing of the BS-IV could be a challenge”, he said.Bank credit for vehicle loans touched Rs 2.13 lakh crore at the end of December 2019 and constituted 8.78% of the total retail loans and 2.42% of the gross bank loans, according to RBI data.India’s leading tractor maker Escorts had said after its December earning conference call that financing has improved after the festive season, led by higher participation from banks and LTV has now come back to a normal level.Vehicle loan growth rose in the December quarter as automakers collaborated with banks and NBFCs to enhance the loan-to-value ratio — ratio of loan disbursed compared with ex-showroom price of vehicle — to ease the burden on the consumer by reducing initial cash outflows.Several automakers were able to convince some bankers about the need for relaxation in their loan-tovalue ratio, with there being a lower probability of slippage, particularly among salaried and corporate customers. This has resulted in the banking channel restoring LTV ratio to the normal level of 85-90% from the 75-80% seen in the risk-averse July-August period.According to CIBIL data, the average balance per account for auto loans stood at Rs 4.9 lakh in September 2019, and the delinquency rate in the same period was of 3.1%. Vehicle loans grew 13.73% annually between FY14 and FY19, while volumes of all vehicles grew 7% in the same period. This suggests that vehicle sales growth is mainly driven by higher financing.Economists say that NBFCs have withdrawn from the market to an extent, so banks have come in to that space. Besides, credit bureau scores help price customers’ fines, which adds to the comfort of the bankers. “What makes an outreach programme distinct from normal times is that banks go directly to the customer during an outreach initiative, rather than the other way round in normal times,” said Sameer Narang, chief economist, Bank of Baroda. That leads to higher sales through dealers.