Fin secy meets heads of foreign, private banks

Finance Secretary Arun Ramanathan on Wednesday held a meeting with top executives of private and foreign banks to review liquidity situation and interest rate scenario following a series of steps taken by the Reserve Bank to improve cash flow in the system.

The meeting comes a day after Finance Minister P Chidambaram met heads of PSU banks and got an assurance from Indian Banks Association that banks would consider interest rate cut and come up with some decisions on the price at which credit will be delivered to different sectors.

Following the meeting many public sector banks announced their decision to cut lending rates by up to 75 basis points.

Finance secretary's meeting, among others, was attended by RBI Deputy Governor V Leeladhar, ICICI Bank joint managing director Chanda Kochhar, J & K Bank chief Haseeb A Drabu, HDFC Bank managing director Aditya Puri and representatives of Axis Bank, HSBC, Citigroup and Duetsche Bank.

Other senior officials of the finance ministry were also present at the meeting.

The finance minister, after meeting heads of PSU banks on Tuesday, had told reporters that finance secretary will hold a meeting with the private and foreign banks to discuss various issues concerning the banking sector.

During the past one month, RBI took a series of steps for improving liquidity situation, which include sharp reduction in the mandatory deposit that banks keep with the central bank and short-term lending (repo) rate at which banks borrow from the RBI.