Shares of the leading auto companies were trading higher in the morning trade on BSE on the plan of finance minister and RBI governor to provide additional capital to banks to enable to provide cheaper loans to customers for buying vehicles and consumer durables.
Auto stocks including Tata Motors, M&M, Hero MotoCorp, Maruti Suzuki, Bajaj Auto, among others were trading up by 2-6 per cent in the morning trade on BSE. The BSE Auto index was the leading gainer among sectoral indices with over 2 per cent advance.
This fund infusion will be over and above the original amount earmarked for banks as per the annual budget. The decision was taken at a meeting between RBI governor Raghuram Rajan and Finance Minister P Chidambaram on Thursday.
"This amount (Rs 14,000 crore provided for capital infusion in Budget) will be enhanced sufficiently. The additional amount of capital will be provided to banks to enable them to lend to borrowers in selected sectors such as two-wheeler, consumer durables, etc at lower rates in order to stimulate demand," a finance ministry statement said, as per the report.
The move is aimed at reviving the country's manufacturing sector which is grappling with various issues by boosting the consumer demand.
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