| There is scope for banks to cut lending rates further:Subbarao |
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Bangalore, May 13 (PTI): Reserve Bank Governor D Subbarao today said there is scope for banks to reduce lending rates further and expressed confidence that India's economic recovery will be "swifter and sharper".
"We are not a demand-strained economy. Once the confidence is restored, there will be faster recovery...," he said, adding that the drivers of India's growth story "remained intact". "The challenge lies in implementing the fiscal stimulus measures rigorously," he said at an interactive session organised by CII on 'India and the Global Financial Crisis: Four Questions'. Speaking on bank lending rates, he said though most banks had reduced their lending rates by 50-250 basis points and expanded bank credit, "there is still scope for banks to reduce their lending rates". He pointed out that 75 per cent of the lending was below bank prime lending rate. "In the current economic context and policy initiatives, there is "considerable scope for banks to reduce lending rates", he said. Observing that credit flow should continue, he said maintaining quality of credit flow was extremely essential. |
