Case for cutting interest rates by banks: Chidambaram

With not all banks cutting rates in response to the RBI's easing of monetary policy, the government today said there is a case for reducing lending rates further to spur economic growth.

"There is a case for deposit rates coming down, (and) lending rates coming down further. I think there is a case for the prime lending rate coming down (even more)," Home Minister and former Finance Minister P Chidambaram told reporters at a function of the National Institution of Public Finance and Policy (NIPFP) here.

He said the government has urged monetary authorities to act swiftly and cut rates, and set policy rates at a lower level.

 

"What remains is that the ball is now squarely in the court of banks. For some reason banks have become completely risk-averse. We have to prod them, nudge them, in fact in stronger words to get moving. I think they have begun to move but not quite enough," he said.