PSU banks to cut interest rates: IBA

Heads of state-owned banks are meeting in the capital to take a view on interest rate cuts, which may be more than 50 basis points, and firm up steps to increase the flow of credit to industry, reeling under the impact of slowdown. "Apart from interest rates, there are other issues on the agenda like the flow of credit to productive sectors," Indian Banks' Association (IBA) Chairman T S Narayansami told reporters ahead of the meeting of bankers with External Affairs Minister Pranab Mukherjee, who is currently holding the charge of the Finance Ministry. When asked whether the interest rates could go down by 25 to 50 basis points, he said, "It could be more", depending on the outcome of the meeting. The bankers were going to cut interest rates, he said, adding that the timing of the rate cut would be discussed at a high-level meeting being attended by chairmen of various banks including State Bank of India, Punjab National Bank and Canara Bank and senior officials of the Finance Ministry.