Yes Bank’s Rajan Pental: India’s Auto Loans Still Aren’t ‘Embedded’ Like the West’s

India’s auto loan industry has spent years selling instalment products but has yet to build a genuinely embedded financing model, according to Rajan Pental, executive director at Yes Bank, speaking at FADA’s 5th Finance and Insurance Summit 2026 in Mumbai.

‘While the industry has been providing auto loans as an instalment product, we have not yet succeeded in developing an embedded product,’ Pental said, describing how customers today walk into showrooms already well-informed about the car they want, only to have the sale slowed down by having to deal with multiple lenders.

He contrasted this with developed markets, where lenders and OEM captives already offer fully digital, embedded credit directly at the dealership or through online configurators — complete with instant approval decisions, e-signatures and financing tied straight to the vehicle order. In Europe and the US, he said, embedded finance is evolving into platform-led models in which banks plug directly into OEM, dealer and marketplace systems rather than pushing standalone loan products.

India’s market still leans heavily on traditional loans, with leasing making up only about 1.5% of the market and subscription models a mere 0.1%. Pental called on the industry to go beyond fixed ex-showroom pricing and build financing schemes tailored to individual pin codes, arguing that banks, as heavy technology users, are well placed to integrate systems that serve pre-approved borrowers directly.

Other speakers echoed the urgency for reform. FADA president C S Vigneshwar described finance and insurance as the ‘load bearing walls’ of dealership viability, while Raul Rebello, MD and CEO of Mahindra Finance, noted that the industry has scaled up enough that the rural-urban sales gap is closing, with co-lending emerging as a fresh area for innovation given how many financiers now operate at a single dealership.