Private sector banks to cut lending, deposit rates news
05 November 2008

Mumbai: Private sector banks in the country, including foreign banks, are expected to cut lending rates and deposit rates in the next 15 days, finance secretary Arun Ramanathan said after a meeting with heads of private sector banks.

Private sector banks are expected to consider reducing lending rates in the next few days and will support credit lines to non-banking finance companies and mutual funds, he said.

''The heads of foreign and private banks have assured that they would seriously examine reduction of interest rates," Ramanathan said, adding, ''They did say, liquidity is better now and liquidity continues to be an item which has to be monitored on regular basis."

The decision comes after an improvement in the liquidity situation, following a number of steps taken by the Reserve Bank and the government.
 
Public sector banks had offered to cut lending rates by up to 75 basis points following a meeting with finance minister P Chidambaram yesterday.

The RBI had, over the past few weeks, cut its main short-term lending rate, the repo, thrice and lowered  banks' cash reserve and statutory liquidity reserve requirements to ease a squeeze on credit and support growth amidst a global recession.

The meeting was attended, among others, by RBI deputy governor, V Leeladhar, ICICI Bank joint MD Chanda Kochhar, J&K Bank chief Haseeb Drabu, HDFC Bank MD Aditya Puri and representatives of Axis Bank, HSBC, Citigroup and Deutsche Bank.


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Private sector banks to cut lending, deposit rates