Finance Minister, Mr. P Chidambaram has called a meeting of PSU bank chiefs and would ask them to pass on the benefit of rate cut by RBI to borrowers.
"I have called the chairpersons of public sector banks towards the end of this month and have a chat on these issues. We will talk to the banks. I think they are cautious. Caution is good, but you can't be overcautious," FinMin said.
Mr. Chidambaram also said that although reserve Bank of India has reduced the policy rates by 1.3 per cent since January 2012, banks have lowered the lending rates by only 0.3 per cent.
The industry has been complaining about the banks not passing on the benefit of rate cut to corporates and retail borrowers.
The pressure is mounting on RBI to cut the interest rates to boost industrial growth, which declined to 2.2 per cent in April this year.
Mr. Chidambaram further said that PSU banks would require Rs 15,000-20,000 crore worth capital per year for the next five years to meet the global capital adequacy norms.