Told PSU banks to pass on interest rate cuts: Anurag Thakur

New Delhi: The government has asked public sector banks to pass on lower interest rates to end consumers, Minister of State for Finance Anurag Thakur said today.

Finance Minister Nirmala Sitharaman has held a slew of review meetings with public sector banks to ensure that adequate credit and liquidity is available to all sectors of the economy, especially the micro, small and medium enterprises.

The government had earlier said PSU banks will organise "shamiana" meetings in 400 districts to increase credit disbursement ahead of the festival season. In the first phase of this outreach programme, state-owned banks disbursed a total of 817.81 bln rupees.

Against a repo rate reduction of 110 bps by the RBI between February and August, the weighted average lending rate on fresh rupee loans by commercial banks have come down by only 29 bps. In case of outstanding loans, the rates were increased by 7 bps during the same period.

On Oct 4, the Reserve Bank of India's Monetary Policy Committee cut the repo rate by 25 basis points to 5.15%, taking the cumulative easing in 2019 to 135 bps.

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