 "Govt nudges banks to cut interest rates")
"Banks are autonomous and the government has given very strong signal by maintaining the fiscal deficit at 3.5 per cent and resetting small savings rates. RBI has reduced the policy rate by 25 basis points. One would expect banks to take a policy call and I am sure they would do it in the days and weeks to come," Das said.
The Reserve Bank, in its first bi-monthly policy review of the current financial year on April 5, cut interest rate by 0.25 per cent and introduced a host of measures to smoothen liquidity supply to help banks lend more money to productive sectors and indicated an accommodative stance, going forward.
Banks are now also expected to do effective transmission of rates, he said, adding that part of it has already been done by adopting the marginal cost of funds-based lending rate (MCLR) and reducing the rate of interest marginally.
"We would expect the banks to do a more effective transmission of rates. I do expect banks to take steps in that direction," he said.
Das further said India is moving towards a low interest rate regime as inflation is under control. "We are looking at a regime of low interest rates, thanks to inflation being under control and various measures which the government has taken. The finance minister has given a very strong message that India should move to a low interest regime by sticking to the fiscal deficit of 3.5 per cent," he added.
"The Parliamentary Committee is expected to submit its report on April 29 and it would be endeavour of the government to get the (Bankruptcy) Bill passed in the second leg of the Budget session," he said.