Citi's car loan scheme not game changer

Singapore

CITIBANK'S latest salvo in the car loans business might seem like a valiant attempt to rid the middlemen on behalf of the customer. But the drive could hit that proverbial wall, given the powerful influence that car dealers wield in the car loans market.

In a week's time, the bank will offer in-principle approval for a car loan to customers, before they shop for a car. This deviates from the existing practice, under which car companies receive a commission from the bank in exchange for submitting a loan application on behalf of the car buyer.