<p>Stating that low interest rates spur economic growth, Finance Minister P Chidambaram today asked banks to improve their operational efficiency to bring down the rates, and pass on the benefit to borrowers.<br /><br /></p>.<p>"Banks should try to rationalise interest rates offered to customers...to a large extent, lower interest rates depend on policy rates. Banks can attempt to improve their operating efficiency, reducing costs, and pass on the benefit to borrowers through lower interest rates," a State Bank of India statement quoted Chidambaram as saying.<br /><br />"Lower interest rates would act as a spur to economic growth and alter customer sentiment," he added.<br /><br />Chidambaram spoke to the SBI brass at the headquarters of the country's largest lender during his visit here.<br /><br />The Reserve Bank of India recently lowered its key lending rate by 0.25 per cent and complimented it with a similar reduction in the cash reserve ratio to infuse liquidity.<br />Some banks have passed the benefit to the borrowers by a similar extent, but many others have desisted, citing high cost of funds, which is attributed to the slower growth in deposits.<br /><br />Official data released yesterday said growth in 2012-13 is estimated to fall to 5 per cent.<br /><br />During the interaction, the SBI management discussed the ground situation vis-a-vis revival in demand in infrastructure, manufacturing and services sector, stressed sectors and some sector-specific performance like engineering goods, consumer goods and residential housing space, the SBI statement said.<br /><br />Chidambaram addressed the board of directors of the bank during his two-hour-long meeting.<br /><br />He also inaugurated 101 branches of the bank, across 14 states, in a virtual way, the statement said, adding that the bank's network now has 14,598 branches.<br />Earlier in the day, he inaugurated state-run Punjab National Bank's building premises at Bandra Kurla Complex.<br /><br />PNB Chairman K R Kamath said the building will house its integrated treasury operations and also serve as a circle office for Mumbai.</p>
<p>Stating that low interest rates spur economic growth, Finance Minister P Chidambaram today asked banks to improve their operational efficiency to bring down the rates, and pass on the benefit to borrowers.<br /><br /></p>.<p>"Banks should try to rationalise interest rates offered to customers...to a large extent, lower interest rates depend on policy rates. Banks can attempt to improve their operating efficiency, reducing costs, and pass on the benefit to borrowers through lower interest rates," a State Bank of India statement quoted Chidambaram as saying.<br /><br />"Lower interest rates would act as a spur to economic growth and alter customer sentiment," he added.<br /><br />Chidambaram spoke to the SBI brass at the headquarters of the country's largest lender during his visit here.<br /><br />The Reserve Bank of India recently lowered its key lending rate by 0.25 per cent and complimented it with a similar reduction in the cash reserve ratio to infuse liquidity.<br />Some banks have passed the benefit to the borrowers by a similar extent, but many others have desisted, citing high cost of funds, which is attributed to the slower growth in deposits.<br /><br />Official data released yesterday said growth in 2012-13 is estimated to fall to 5 per cent.<br /><br />During the interaction, the SBI management discussed the ground situation vis-a-vis revival in demand in infrastructure, manufacturing and services sector, stressed sectors and some sector-specific performance like engineering goods, consumer goods and residential housing space, the SBI statement said.<br /><br />Chidambaram addressed the board of directors of the bank during his two-hour-long meeting.<br /><br />He also inaugurated 101 branches of the bank, across 14 states, in a virtual way, the statement said, adding that the bank's network now has 14,598 branches.<br />Earlier in the day, he inaugurated state-run Punjab National Bank's building premises at Bandra Kurla Complex.<br /><br />PNB Chairman K R Kamath said the building will house its integrated treasury operations and also serve as a circle office for Mumbai.</p>