The State Bank of India is going all out to push retail loans.

After grabbing a sizable chunk of the incremental home loan business by slashing interest rates drastically, the country's largest commercial bank is now targeting car loans in a big way.

It is set to enter into an arrangement with Maruti Udyog to hawk car loans directly, bypassing the direct sales agents, general sales agents and even the dealers.

The bank is also in the process of making forays into travel-related businesses by introducing travel cards for domestic travel.

This is an addition to the domestic travellers' cheques that have been part of SBI's product offerings.

Once SBI signs the agreement with Maruti, a consumer can call up a bank branch, specify the model and colour of the car. The vehicle will be delivered at his doorstep.

Even though the car loan rate of the bank is 11.25 per cent, the effective interest rate will work out cheaper as the subvention will be passed onto the consumers directly.

"Normally, the commissions are split between the dealers, DSAs and GSAs. Since these agents will not be present in the deal, the consumers will get bulk discounts," said an industry source. The dealers will, however, be involved for the after sales service, et cetera.

"The dealer support will be there after the car is sold but at the initial stage it will be between the car manufacturer and the bank, and the entire front end discount will be passed on to the consumer," sources said.

The bank is also giving final touches to its plans to enter the travel business by introducing travel cards. Unlike the travellers' cheques which can only be encashed at SBI branches, the pre-paid travel cards can be used directly at the commercial establishment as a debit card to purchase goods.

Besides, they can also be used at SBI automated teller machines to withdraw money.

At the end of the tour, a consumer can claim the residual money -- if any -- by returning the travel card to the bank.

The bank is yet to decide on whether it will be a magnetic-strip, throw-away card or a chip-based card which can be retained to replenish funds after the initial amount stored is exhausted.

In case it decides for a throwaway card, the bank is unlikely to charge any fees for the travel card. Still the new product will add to the bottom line of the bank as it will get the float money from the travel card buyers.

SBI has recently introduced specialised retail loan packages for professionals such as teachers, doctors, lawyers and police.

All these packages have pushed the bank's retail portfolio, while the credit growth in the manufacturing sector is still tardy. Meanwhile, late last week, SBI slashed its home loan rate by 25 to 75 basis points across various loan maturities.

It has also introduced a new two-slab home loan structure whereby fresh home loans taken for up to 10 years will be charged 9 per cent and loans above 10 years maturity will be charged 9.5 per cent. These rates are for floating rate loans.

The fixed rate loans on both the slabs will be 25 basis points higher. The new rates come into effective from February 3, and are applicable only to fresh loans.