Commodity Online
NEW DELHI : Finance Minister P Chidambaram on Tuesday announced that Public Sector Undertaking Banks have assured him to slash lending rates by 0.75 percent.
Speaking to reporters after his meeting with heads of the public sector banks here, the FM said, "Indian Banks Association has assured that it will reflect on the matter (demand for rate cuts).
The meeting was held to review liquidity situation and performance of the lenders. He said Finance Secretary has called another meeting of the private and foreign banks to discuss the issue.
Public sector banks have assured government that they will look into the demand for lowering interest rates, Chidambaram said. The banks are also ready to enhance credit to Small and Medium Enterprises and housing sector to ensure adequate liquidity to the sectors. The credit guarantee on loans is also going to be extended to Rs one crore.
RBI would soon take a decision on extending a line of credit of Rs 10,000 crore to the National Housing Bank to ensure that adequate funds are available for the housing sector.
The Finance Minister said demand for credit is higher and bankers are feeling the pressure. He has sought from them a fortnightly report on the credit growth. "We are monitoring the situation on a 24 by 7 basis," he said.
Finance Secretary and RBI Deputy Governor will also meet heads of private sector banks to discuss lowering lending rates, Finance Minister said.
The meeting came a day after the captains of Indian industry met Prime Minister Manmohan Singh and demanded steps for enhancing the liquidity and steps to create environment conducive for lowering of interest rates.
SBI Chairman O P Bhatt, PNB chief K C Chakrabarty, Bank of Baroda Chairman M D Mallya, Canara Bank head A C Mahajan, UCO Bank CMD S K Goel were among those who attended the meeting, where top officials of the Finance Ministry and RBI were also present.
Prime Minister had said that government was behind the banking system and that no one should fear about the safety of bank deposits in the wake of global financial crisis and its resultant impact on India.
