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FM asks PSU bank heads to cut lending rates

Many banks are reluctant to pass on the benefit of RBI rate cut to borrowers

June 14, 2013 2:20 IST | India Infoline News Service
Finance Minister P Chidambaram on Thursday said that it has called the heads of PSU (public sector units) banks towards the end of this month to pass on the benefit of RBI (Reserve Bank of India) rate cut to corporates and retail borrowers.

Although RBI has reduced the policy rates by 1.3% since January 2012, banks have lowered the lending rates by only 0.3%, the finance minister added.

Many banks are reluctant to pass on the benefit of RBI rate cut to borrowers.

PSU banks would require capital worth Rs. 150 billion to Rs. 200 billion annually for the next five years to meet the global capital adequacy norms.

The whole proceeds of disinvestment would be used for meeting the capital needs of PSUs, including banks, the minister added.


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