Home and other retail loans and industrial lending may become cheaper soon as public sector banks are likely to cut interest rates after the government today prodded lenders to provide credit at reasonable rates to spur the economy.
"Our bank will decide on lowering interest rates by the end of this month," country's largest lender SBI's Chairman O P Bhatt told reporters after a meeting between PSU bank heads and Finance Minister Pranab Mukherjee here.
Expressing concern over non-availability of credit at affordable prices from banks, Mukherjee said, "As a financial intermediary, the banks have to stand-by to provide credit at reasonable rates. This is an area of concern in many quarters both within the government and outside."
He said reduction in key rates by RBI is not getting adequately reflected in the reduction of prime lending rates by banks. "I would urge the banks to address these concerns expeditiously and in adequate measure. This will help restore the environment for rapid growth and ensure that the growth process benefits all our people," Mukherjee said.
To a query as to how much the rates could be cut, the finance minister told reporters, "All possibilities will be explored.I can't quantify it (rates cut)."
