Shares of consumer durables and two-wheeler makers gained on BSE at 10:02 IST as state-run banks will soon provide cheaper loans to fund purchases of TVs, refrigerators, motorcycles and scooters.
Among two-wheeler makers, TVS Motor Company (up 6.61%), Hero MotoCorp (up 1.03%) and Bajaj Auto (up 1%), edged higher.
Among consumer durable stocks, Videocon Industries (up 1.61%) and Whirlpool of India (up 0.52%), edged higher.
The BSE Sensex was up 77.24 points, or 0.39% at 19,979.31.
The finance ministry on Thursday, 3 October 2013, said that the government will provide additional amount of capital to state-run banks (PSU banks) to enable them to lend to borrowers in selected sectors such as two wheelers, consumer durables etc, at lower rates in order to stimulate demand. While this will bring relief to the consumers, especially the middle class, it is also expected to give a boost to capacity addition, employment and production, the finance ministry said in a statement.
This decision is based on the discussions between Dr. Raghuram Rajan, Governor, Reserve Bank of India (RBI) and the Union Finance Minister, Mr. P. Chidambaram. At the end of September 2013, growth of gross bank credit stood at about 18%, year-on-year. However, credit growth is sluggish in some sectors leading to the conclusion that demand in these sectors remains subdued, the finance ministry said. It may be recalled that in the Union Budget for 2013-14, a sum of Rs 14000 crore was provided for capital infusion in PSU banks. This amount will be enhanced sufficiently, the finance ministry said.
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