Lowering of interest rates need of the hour :FICCI

Commenting on the lending rate cuts announced by banks such as SBI, Union Bank of India and IDBI, FICCI on Monday said lowering of interest rate is the need of the hour.

"This reduction in the lending rates comes as a booster dose for the economy and will give a leg up to both consumption and investment demand. It is heartening to see the banks moving forward towards an easier lending rate regime and we hope that this rate cut cycle will be carried forward. With ample liquidity now at their disposal and with credit growth moving a slow pace, a lowering of interest rates was the need of the hour" Pankaj Patel, President, FICCI said.

"This is a clear positive that can be attributed to the demonetization move of the government and we hope to see more such decisions in the near future. Even the Prime Minister Narendra Modi had mentioned on Saturday that banks need to make extra effort to cater to the needs of the poor, lower middle class and middle class and these announcements are a clear reflection of this intent", he added.

Prime Minister Narendra Modi in his address to the nation on Saturday had appealed to the banks flush with currency to move beyond their traditional priorities, and keep the poor, the lower middle class, and the middle class at the focus of their activities.

The country's largest lender -- State Bank of India (SBI) -- on Sunday slashed its benchmark lending rate by 0.9 per cent across various maturities with immediate effect.