Multi-billion dollar Hinduja Group today said it has received the Reserve Bank's approval for carrying out vehicle financing business in India.
The new entity Hinduja Leyland Finance (HLF), being established with an initial capital of Rs 100 crore to be contributed by promoters, has begun talks with bankers for funding its planned disbursement of Rs 850-crore loan in the first year.
HLF, promoted by Hinduja Group's flagship firm and automaker Ashok Leyland, has received the certificate of registration from the RBI for commencing operations related to financing of commercial and allied vehicle financing.
The company aims to commence operations in 130 centres across 16 states and targets a network strength of 300 centers in three years, it said in a statement.
"HLF provides the vital link of vehicle financing, facilitating vehicle acquisition by our customers... I am confident that... HLF will prove to be a significant tool for market penetration and expansion for Ashok Leyland," Ashok Leyland Managing Director R Seshasayee said.
The initial capital of Rs 100 crore, the company said, will be contributed by Ashok Leyland, Ashley Holdings and Ashley Investments.
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The company is already in discussion with leading bankers for funding to support the planned disbursement of Rs 850 crore in the first year, it added.
It further said, HLF will have a larger role in the offing, of supporting Ashok Leyland's proposed foray into light commercial vehicles and construction equipment, wherein product rollouts are scheduled to commence in 2011.