Fm Wants Further Rate Cuts
At the dinner meet, attended by chiefs of commercial banks, the finance minister made a strong plea for aggresive lending by banks. He pointed out that banks were not just being cautious about lending but had totally backed off taking credit risk.
The basic function of banks is to lend and not be overcautious, Chidambaram said.
Bank chiefs indicated to the finance minister that such a stance was the result of the previaling atmosphere in the industry where the regulatory authorities have been raiding the premises of bank executives.
The finance minister also met the chiefs of GIC and LIC along with trade unions representatives and discussed the opening up of the insurance sector. Chidambaram approved the expansion of LIC's board strength from five members to 13.
He announced the names of the non-exucutive members to the LIC board, which included emminent personalities like Indira Gandhi Institute of Developement Research director Kirith Parikh, former CAG C G Sommaiya, chartered accountant Rajendra Chitale, former EXIM Bank MD Tarjani Vakil, Consumer Unity & Trust Society president Pradeep Mehta and K R S Murthy, director of IIM Bangalore.
The trade unions were represented among others by the All India LIC Employees' Federation and All India Insurance Employees' Association.