Pranab may ask banks to cut rates to push credit flow | business | Hindustan Times
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Pranab may ask banks to cut rates to push credit flow

business Updated: Feb 02, 2009 01:03 IST

PTI
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Reduction in home, auto and corporate loan rates and review of sectorial credit flows are likely to figure prominently when officiating Finance Minister Pranab Mukherjee meets heads of public-sector banks on Monday.

Though the Reserve Bank slashed its key-rates several times since October, banks are yet to translate the full benefits of rate cuts to customers by reducing their lending rates in a significant manner.

"Banks are likely to be asked to cut their rates further, at the meeting. That apart, the Government is also likely to ask banks to push lending to SMEs and NBFCs," a senior IBA official told PTI in Mumbai.

Other issues that are likely to come up for discussion in the meeting include review of sectoral credit flows to total non-food credit, housing, auto and commercial vehicles, infrastructure and agriculture.

Mukherjee is also likely to discuss the implementation status of proposals announced in the fiscal stimulus package, such as utilisation of the Rs 5,000-crore refinancing facility by RBI to National Housing Bank and Rs 9,000-crore to Sidbi, the official said.

The ministry is also likely to review the status of sectoral NPAs in housing and real estate, auto, SME, infrastructure and agriculture portfolios, the official said.