New Delhi: The banks have, in a meeting with Finance Minister Nirmala Sitharaman on Monday, agreed to take steps to review lending rates, considering they have not "commensurately" transmitted the RBI rate cuts to the borrowers.
The Reserve Bank of India has cut policy rates by 75 basis points since December 2018, but banks have been stingy in reducing their lending rates.
"Banks need to commensurately transmit rate cut benefit in lending. In the meeting, banks agreed to take steps as per RBI guidelines to review their lending rates," said an official release, issued after Sitha-raman’s meeting with the heads of public sector banks and private lenders like HDFC Bank, ICICI, Axis, Kotak Mahindra Bank and Citi Bank.
Earlier, in a press briefing on Monday, Sitha-raman said, “The government will consider issues facing various sectors and will come out with a solution.”
She will meet industry heads on Tuesday, starting with micro, small and medium enterprises, or MSMEs. Besides, the Finance Minister will engage with various stakeholders this whole week. Also, she will meet representatives of key sectors such as auto, industry and real estate to discuss about their concerns.
Finance Secretary Rajiv Kumar said, “She will meet all representatives of MSME sector. Besides, the minister will meet representatives from auto sector on August 7, industry on August 8, financial sector representatives on August 9 and stakeholders from the realty sector and homebuyers on August 11.”
When asked about the government’s plan on issuing sovereign bonds, Sitharaman said there hasn’t been much work on that. “It was mentioned in the Budget, I know some numbers were floating around because the earlier secretary had mentioned it,” she said, adding that Economic Affairs Secretary Atanu Chakraborty would hold discussions with representatives of foreign portfolio investors (FPIs) soon.
“He (Chakraborty) will also directly talk with FPI representatives. The secretary will be holding a consultation with them, walk up to them, talk to them and make us understand or hear them out what they have to say. Maybe, some view from the government will come that day," Sitharaman said.
