Smaller banks likely to cut rates after SBI, PNB

Smaller banks likely to cut rates after SBI, PNB
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First Published: Mon, Feb 02 2009. 12 40 PM IST
Updated: Mon, Feb 02 2009. 12 40 PM IST
New Delhi: Smaller state-run banks are expected to follow State Bank of India and Punjab National Bank in further cutting lending rates in days to come, a senior finance ministry official said on Monday.
Rising non-performing loan rates, especially on housing loans, is a matter of concern, said the official who did not wish to identified.
The finance ministry has convened a meeting of heads of state-run banks on Monday to discuss ways of improving credit flow in a slowing economy.
Meanwhile, the chief of India’s top lender, State Bank of India, expects interest rates to fall in the short term.
Asked whether domestic interest rates would come down soon chairman OP Bhatt said: “I think so. Looks like it.”
The Reserve Bank of India left policy rates unchanged at its quarterly review last week but urged lending banks to pass on the benefits of previous cuts in a slowing economy.
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First Published: Mon, Feb 02 2009. 12 40 PM IST