Business Daily from THE HINDU group of publications
Wednesday, Nov 05, 2008
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Business Daily from THE HINDU group of publications Wednesday, Nov 05, 2008 ePaper | Mobile/PDA Version | Audio | Blogs |
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Credit Market Money & Banking - Interest Rates ‘Pricing of credit matters’
Our Bureau New Delhi, Nov. 4 The Finance Minister, Mr P. Chidambaram, on Tuesday called on the banking community to not only track the credit being delivered but also ensure that it is delivered at a price where “credit will flow”. Briefing newspersons after a meeting with the chief executive officers of public sector banks, the Minister said that banks had been asked to give “a fortnightly report” on the sectors to which credit is going so that action can be taken on a real time basis. Currently banks report only aggregate credit growth. “I have impressed on banks that liquidity is only the first step, the next important step is price - at what price credit will be delivered to the borrower. We have had extensive discussions. The Indian Banks’ Association has assured me that the banks will reflect on the matter and come up with some decisions on the price at which credit will be delivered to different sectors. The third is actual delivery, where is the credit going,” he said. “All sectors assured me they will deliver at an appropriate price. I think the discussion on pricing and delivery of credit will lead to some very encouraging decisions by the PSU banks,” he said. The Minister refused to say whether the discussions would lead to a southward movement of interest rates. The Minister said that SIDBI has agreed to extend the credit guarantee scheme to loans between Rs 50 lakh and Rs 1 crore. The request of both SIDBI and National Housing Bank for additional line of credit of Rs 10,000 crore each is being examined by the Reserve Bank of India. Bonds stable as traders take cue from RBI to expand credit ‘Credit growth moderate, within RBI’s projection’ Credit crunch not coming from banking system More Stories on : Credit Market | Interest Rates | Public Sector Banks | Politics
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