mumbai icici bank which slashed retail lending during the credit crisis has cut car loan rates and raised dealer commissions as it seeks to regain its past glory as a dominant retail lender said people familiar with the matter icici bank is said to have cut interest rates on car loans to 975105 from 105115 as these are rack rates the customer may now get a loan at around 9 as dealers pass on some of their commissions to customers the new rates which is 5075 basis points lower than rivals such as hdfc bank and axis bank may force other lenders to cut their rates to avoid losing market share said the people icici is returning to the lucrative retail market as consumers flock back to showrooms because of record low interest rates and the fading fears of job losses automobile sales are at record levels and the worlds biggest such as volkswagen renault and toyota are lining up new models for india icici which pioneered retail lending in the country consciously shrank its retail lending as it was the worst affected among indian banks during the credit crisis since it had a huge presence in overseas markets our rates are in line with competition and payout are at an average of 2 also in line with competition said an icici bank spokesperson icicis car loans fell to less than rs 50 crore a month during the lean times from a peak of over rs 1000 crore a month the rate cut at a time when experts are forecasting a rise in interest rates has surprised rivals this is coming at a time when we are seeing a gentle firming up of interest rates on the liability side said sumit bali ceo of kotak mahindra prime a specialised auto lender we are observing the situation and will take counter measures if needed kotak mahindras car loan rate is 10511 while hdfc bank charges 105115 policy makers are expected to rollback the unprecedented lose monetary policy stance as the economy recovers on the back of strong demand which is also threatening to push inflation higher rbi is scheduled to review monetary policy on january 29 the market is factoring in higher rates this year yields on the benchmark 10year government securities has risen more than 200 bps in the past one year a basis point is 001 the staterun union bank of india recently raised deposit rates to 675 for 555 days from 6 for 12 years but icicis gamble on rates may not succeed given that all rivals are unlikely to react in a jiffy we never overreacted in these situations before we will watch the situation over the next few days said ashok khanna evp of hdfc bank banks are also paying more commission to dealers than before about 18 months ago banks cut dealer commission to an average of 2 from 4 icici is said to have now increased the dealer commission to 2253 other financiers could