Chidambaram wants banks to cut lending, deposit rate by 0.5 percent

January 4th, 2008 - 9:37 pm ICT by admin  

New Delhi, Jan 4 (ANI): Union Finance Minister P Chidambaram today said that he would like banks to cut lending and deposit rates by 50 basis points.
“I would like, I can’t wish this, that banks cut lending and deposit rates by 50 basis points so that it stimulates investment and consumption,” Chidambaram told reporters here.
“They will have to mobilise deposits and they will have to lend and I am sure they will do well in the last quarter of the current financial year. At least we should aim to have stable interest rates and hope to moderate rates in the medium term,” he added.
Talking about the credit growth, he said: “RBI (Reserve Bank of India) took several steps to moderate credit growth. The CRR was increased. risk weight was increased. Therefore the credit rate was moderated. But that is a deliberate policy stance.”
Meanwhile, Vijaya Bank’s Chairman and Managing Director, Prakash Mallya said that the banks had reached a consensus that growth oriented deposits would be encouraged.
“All banks have decided that bulk deposits with higher costs will not be taken and growth deposits will be taken. Rest, any decision on interest rates will be taken after the monetary policy. But, the rates will not go beyond those that are prevailing,” Mallya said. (ANI)

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