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October 05, 2007 14:34 IST
Concerned over high lending costs impacting key sectors such as automobiles, the government asked bankers on Friday to have a re-look at their interest rates in order to stimulate growth.
Emerging from a meeting called by Finance Minister P Chidambaram with bankers and representatives of automobiles, auto components and paper industry, Maruti [Get Quote] Suzuki India Managing Director Jagdish Khattar told reporters that the minister had taken up the issue of high interest rates.
"He (Chidambaram) asked bankers to have a re-look at interest rates in order to stimulate demand. Costs of auto industry have increased and everybody understands there is a problem and it has to be rectified," Khattar said.
Tata Motors [Get Quote] Managing Director Ravi Kant also said the auto industry raised the issue of high interest rates that has resulted in declining sales during the meeting.
Admitting that the rising interest rates was a matter of concern, Punjab National Bank [Get Quote] chairman and managing director K C Chakrabarty said the finance minister had asked bankers to create positive sentiments.
"We will try to find out ways and means how their problems can be addressed," Chakrabarty said, but declined to commit if PNB would cut rates anytime soon.
SBI [Get Quote] chairman O P Bhatt, however, said interest rates are likely to remain stable at least till the mid-term review of monetary policy by the RBI on October 30.
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