The Hindu Business Line : Liquidity improving, say banks

Top bankers on Monday told the Finance Minister, Mr P. Chidambaram, that the liquidity situation was improving compared to the tightening of liquidity that banking system had witnessed towards the end of the previous fiscal.

"The Finance Minister discussed the liquidity situation with us. We have told him that the situation has improved compared to what it was on March 31," the Chairman and Managing Director, Punjab National Bank, Mr S.C. Gupta, told Business Line.

During recent months, banks have been witnessing a tightening of the liquidity situation in the wake of sudden spurt for credit from industry.

On his part, Mr Chidambaram also assured bankers that the Government would ensure that there was enough liquidity in the system. Talking to reporters after the meeting, the State Bank of India Chairman,, Mr A.K. Purwar, said that the Finance Minister has assured banks would not have problems with funds.

During the meeting, Mr Chidambaram, also discussed the modalities to operationalise the new loan scheme to farmers announced in the Union Budget, under which farmers would get loan at 7 per cent up to a loan amount of Rs 3 lakh. The announcement on the modalities is expected soon.

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Liquidity improving, say banks