Bankers summoned to Delhi, to be read riot act on rate

MUMBAI: It is back to the backstage for the government after it, along with the Reserve Bank of India, took centre-stage over the weekend to announce a slew of measures to prop up demand and economic growth.

The finance ministry has summoned bankers to New Delhi for “informal discussions”, which bankers expect will be a brainwashing session where they will be directed to cut interest rates by a big margin.

Banks have been a bit slow in announcing cuts in interest rates although the RBI effected deep 100bps cuts in its repo and reverse repo rates each effective Monday.
Banks are to play a central role in ensuring the government and RBI’s measures are a success. And the government, it seems, is keen to ensure that banks are more forthcoming with rate cuts.

The moral suasion by the government follows the repeated requests by RBI governor D Subbarao Saturday to banks to slash interest rates.

“This meeting was called in a very short notice. It is an informal meeting and there is no set agenda,” a banker who will attend the meeting told NW18.