Private banks vow to consider cut in rates

Private banks vow to consider cut in rates

New Delhi: After state-run banks, their private counterparts on Wednesday assured the finance ministry to consider cut in interest rates in a fortnight, which could lead to softening of home, personal and corporate loan rates.

“They (heads of private, including foreign banks) have assured that they would seriously examine reduction of interest rates," Finance Secretary Arun Ramanathan said after meeting the representatives of private and foreign banks.

Click here to watch video

463c87fa-ab43-11dd-9bdc-000b5dabf613.flvFinance Ministry sources said private bankers are expected to revise interest rates within a fortnight.

RBI has injected more than Rs2,60,000 crore into the system through a series of cuts in reserve ratio and short term lending rate, repo.

Country’s largest private sector lender ICICI Bank Joint Managing Director Chanda Kochhar said consensus at the meeting was that it is in the interest of the economy to have lower interest rates.

“But we will have to see how situation moves before we take a decision. We continue to review it on daily basis," she said.

The meeting came a day after Finance Minister P. Chidambaram held a review meeting with PSU banks, most of which promised to cut benchmark lending rates by up to 75 basis points.

In fact, Syndicate Bank and State Bank of Bikaner and Jaipur on Tuesday announced a 75% reduction in prime lending rates.

(Video by Mehak Kasbekar / Mint)