FM assures chambers, of asking PSU banks to cut interest rates

A day ahead of the interaction with public sector banks, Finance Minister P Chidambaram today assured industry that he would persuade bankers to cut interest rates, even as chambers saw more measures from the RBI to ease money supply.     

"The Finance Minister assured us that he is going to persuade bankers to look at how to reduce interest rates ... he is meeting bankers tomorrow," Assocham President Sajjan Jindal told reporters after meeting Chidambaram here.     

Besides Jindal, CII President K V Kamath and Ficci President Rajeev Chandrasekhar were also attended the meeting with the Finance Minister.     

Kamath, who is also ICICI MD and CEO, also said, "We will review interest rates after watching the impact of the RBI decision on liquidity. The Finance Minister has said he will talk to PSU banks tomorrow."     

"As a banker I say this ... The government cannot actually on its part lower rates. The banks have to lower interest rates," he added.     

Jindal said the Finance Minister assured industry that there would be enough liquidity in the system so that demand flow starts and the situation like the zooming up of the call money rates to 21-22%, as happened on Friday last, would not be allowed to recur.     

When asked whether he expected more measures could be coming from the RBI to ease liquidity, Jindal said, "Hundred per cent. On Saturday, the RBI released more liquidity.

Probably over the next couple of days, the authorities are going to watch and then they will take the next step," he added.