Finance Minister P Chidambaram said on Tuesday that banks have assured him that they would consider the demand for lowering interest rates.
"Indian Banks Association has assured that it will reflect on the matter (demand for rate cuts)," Chidambaram told reporters after his meeting with heads of the public sector banks.
He said Finance Secretary Arun Ramanathan has called a meeting of the private and foreign banks to discuss the issue.
Chidambaram also assured the housing and SME sectors of adequate liquidity.
RBI would soon take a decision on extending a line of credit of Rs 10,000 crore (Rs 100 billion) to the National Housing Bank to ensure that adequate funds are available for the housing sector.
The finance minister said demand for credit is higher and bankers are feeling the pressure. He has sought from them a fortnightly report on the credit growth.
"We are monitoring the situation on a 24 by 7 basis," he said.
