FM Wants Banks To Cut Interest Rates

With inflation within manageable levels and the economy sustaining high growth, Finance Minister P Chidambaram said he favoured banks lowering interest rates to spur growth and arrest slowdown in credit flow.I would like - I can''t wish this - that banks cut lending and deposit rates by 50 basis points so that it stimulates investment and consumption, he said on the margins of a meeting with chief executives of commercial banks in New Delhi.If monetary policy was supportive, interest rates could be lowered, he added.Investment and consumption are the drivers of growth, and we have asked banks to ensure that credit is not denied to the two sectors, the finance minister said, even as credit off-take from consumers appeared to have slowed down this fiscal (2007-08). I have asked banks to increase lending to investors and consumers of consumer durables, non-consumer durables as there is sluggishness in these two sectors, Chidambaram added.