Chidambaram for banks to consider lowering interest rates

New Delhi, Nov 2 : Union Finance Minister P Chidambaram on Sunday said he will ask the public sector banks to consider lowering lending rates to ease the liquidity crunch in the country.

In an interview to a news agency, Chidambaram said that he would take up the issue of interest rate cut during a meeting with chairpersons of public sector banks in Delhi on November 4.

While terming the Reserve Bank of India's (RBI) latest policy package to inject more liquidity in the system as right, Chidambaram said, "I am happy with the policy package announced by the RBI. When it announced its (peak season) policy on October 24, the RBI had promised swift action in case it is necessary to infuse more liquidity."

He further said, "I am happy that the RBI has responded swiftly."

On Saturday, the RBI had announced a slew of measures to inject liquidity in the system.

The apex bank had cut the repo rate by 50 basis points to 7.5 per cent and the cash reserve ratio (CRR) by 100 basis points to 5.5 per cent and the statutory liquidity ratio (SLR) by 100 basis points to infuse an additional Rs 85,000 crore into the system.

In October, the RBI had injected an additional liquidity of Rs.1,85,000 crore in the wake of global financial crisis.

The Finance Minister said the RBI's policy was also a signal to the banks that they should now consider lowering their interest rates.

ANI