Finance Minister Palaniappan Chidambaram today said there was adequate liquidity in the banking system and he has advised banks to lend aggressively.
Chidambaram's comments came after the main stock index - Sensex- plunged further today amid a gloomy global economic outlook.
On short selling, he said Securities and Exchange Board of India is addressing the issue of stock lending by foreign institutional investors (FIIs) to overseas entities. Lending of stocks by FIIs to overseas entities likely to be reversed in the next few days, he added.