ID :
37231
Thu, 12/25/2008 - 06:47
Auther :
Shortlink :
http://m.oananews.org//node/37231
The shortlink copeid
Case for cutting interest rates by banks: Chidambaram
New Delhi, Dec 23 (PTI) With not all banks cutting rates
in response to the Reserve Bank of India's (RBI) easing of
monetary policy, the Indian Government Tuesday said there is a
case for reducing lending rates further to spur economic
growth.
"There is a case for deposit rates coming down, (and)
lending rates coming down further. I think there is a case for
the prime lending rate coming down (even more)," Indian Home
Minister and former Finance Minister P Chidambaram told
reporters at a function of the National Institution of Public
Finance and Policy (NIPFP) here.
He said the Government has urged monetary authorities to
act swiftly and cut rates, and set policy rates at a lower
level.
"What remains is that the ball is now squarely in
the court of banks. For some reason banks have become
completely risk-averse. We have to prod them, nudge them, in
fact in stronger words to get moving. I think they have begun
to move but not quite enough," he said.
After the recent round of monetary easing by the RBI,
which included cut in short-term borrowing and lending rates,
a few banks like SBI, HDFC Bank, Bank of Baroda, Bank of India
have cut interest rates, while many are expected to take a
call shortly.
The Reserve Bank has injected around Rs 3000 billion into
the system through cuts in policy rates as well as other
instruments.
After the recent package announced by the government
to boost sectors slowing, Public Sector banks have reduced
interest rates for home loans up to Rs 2 billion.
However, the interest concession was limited to fresh
loans only.
Chidambaram had said in Parliament that the Government
will talk to banks on cutting interest rates for even existing
borrowers as prime lending rates come down.
The mid-year review of the economy for 2008-09, tabled
in Parliament today, said that there is considerable scope for
monetary policy easing over the next six to 12 months.
"An aggressive monetary policy may be necessary if the
global economic depression continues to adversely affect
manufacturing," the review said. PTI TAN
NIK
NNNN
in response to the Reserve Bank of India's (RBI) easing of
monetary policy, the Indian Government Tuesday said there is a
case for reducing lending rates further to spur economic
growth.
"There is a case for deposit rates coming down, (and)
lending rates coming down further. I think there is a case for
the prime lending rate coming down (even more)," Indian Home
Minister and former Finance Minister P Chidambaram told
reporters at a function of the National Institution of Public
Finance and Policy (NIPFP) here.
He said the Government has urged monetary authorities to
act swiftly and cut rates, and set policy rates at a lower
level.
"What remains is that the ball is now squarely in
the court of banks. For some reason banks have become
completely risk-averse. We have to prod them, nudge them, in
fact in stronger words to get moving. I think they have begun
to move but not quite enough," he said.
After the recent round of monetary easing by the RBI,
which included cut in short-term borrowing and lending rates,
a few banks like SBI, HDFC Bank, Bank of Baroda, Bank of India
have cut interest rates, while many are expected to take a
call shortly.
The Reserve Bank has injected around Rs 3000 billion into
the system through cuts in policy rates as well as other
instruments.
After the recent package announced by the government
to boost sectors slowing, Public Sector banks have reduced
interest rates for home loans up to Rs 2 billion.
However, the interest concession was limited to fresh
loans only.
Chidambaram had said in Parliament that the Government
will talk to banks on cutting interest rates for even existing
borrowers as prime lending rates come down.
The mid-year review of the economy for 2008-09, tabled
in Parliament today, said that there is considerable scope for
monetary policy easing over the next six to 12 months.
"An aggressive monetary policy may be necessary if the
global economic depression continues to adversely affect
manufacturing," the review said. PTI TAN
NIK
NNNN
