The State Bank of India (SBI) last week announced a reduction in car loan rates to 8 per cent in the first year, 10 per cent in the second and third years and the prevailing rate thereafter. The new loan scheme will be applicable to new car purchases and also balance transfers, meaning transference of loans from other banks to SBI. A senior bank official said that while other banks in the country could not see any business sense in lowering interest rates, SBI did and that this would help the bank expand its auto loan portfolio, which currently stands at Rs.9,000 crore – already the highest in the country. At present, SBI disburses Rs.300 crore under the car loan scheme on a monthly basis, and the amount is set to go up with the reduction in loan rates.