Ashok Leyland to float financing arm

Mumbai: Commercial vehicle manufacturer, Ashok Leyland will set up a captive vehicle financing arm by the middle of the next fiscal to cater to the hinterlands.

This finance arm will operate in places where the public sector banks or other existing financiers are not present. It will have a Rs 100-150 crore capital base initially.

The arm would be a part of Ashok Leyland Group and would finance only the company-manufactured vehicles and not vehicles produced by others in the automotive industry.

The vehicle financing arm would not cater to the metros and mini-metros since the company intends to reach out to every nook and corner of the society.

Ashok Leyland had signed vehicle finance agreement with Corporation Bank and Bank of Baroda in last month.

The company has also similar tie-ups with State Bank of India, State Bank of Patiala and Jammu & Kashmir Bank.