SIAM expects banks to pass on RBI rate cut benefits as it will boost car demand

Auto industry body SIAM on Friday hoped that banks would pass on the benefits of the RBI's interest rate cut saying it would support demand creation for discretionary products like automobiles.

Society of Indian Automobile Manufacturers (SIAM) President Rajan Wadhera said the 40-basis point reduction in repo rate, which takes the key policy rate to 4 per cent is a welcome step by the Reserve Bank of India (RBI) to support reduction in the cost of borrowing for traders and consumers and, hence, would positively impact consumer demand.

"We are hopeful that banks will pass on the benefit and support demand creation for discretionary products, like automobiles," he added.

In a slew of measures to support the economy which is likely to contract for the first time in over four decades, the RBI slashed interest rates, extended moratorium on loan repayments and allowed banks to lend more to corporates.