Application forms for the Nano, the much-awaited Rs 1 lakh car, will notcome for free. Tata Motors is likely to charge around Rs 300 for everyapplication.

“This is for the first time that a manufacturer will charge for an applicationform. However, it will be refunded if an application is rejected,” said asenior executive at a public sector bank.

Bookings are expected to start by the last week of March. The forms, saysources, will be collected through various channels but transferred to theState Bank of India (SBI). “All the forms and the collected money will betransferred to SBI, where they will be processed, and loans will be giventhrough various banks within 90 days,” said a source at a public sector bank.

“This is being done to manage the applications efficiently, as Tata Motors isexpecting a large amount of bookings,” the source said. When asked, an SBIofficial said he could not share any details on the subject.

A senior executive with a large bank said the interest rates could be cheaperthan the existing auto loan rates. So far, SBI and Punjab National Bank haveannounced tie-ups with Tata Motors, and others like Bank of India, Union Bankof India and Bank of Baroda are expected to follow.

“We are in talks with various public sector banks to provide the widestpossible range of financing options to the customers of Nano,” said a source.

“Once the diesel version comes out, and I expect it to be priced ataround Rs 1.70 lakh, the real volume numbers will come out. But that might takeone to two years and pose a real challenge to small car makers,” he added.