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banks may further cut interest rates

Banks may further cut interest rate by up to 200 basis points or 2 percentage points if the situation allows, chairman of country’s large public sector banks said on Monday after their meeting with finance minister Pranab Mukherjee.

State Bank of India (SBI), Punjab National Bank (PNB), Uco Bank and the Oriental Bank of Commerce (OBC) are among the banks which see the pos-sibility of a further rate cut, provided the cost of funds and inflation come down.

Finance secretary Arum Ramanathan also said that lending rates might come down further as there has been moderation in deposit rates.

Mr Mukherjee, meanwhile, said that there is a need to ensure stimulate growth of labour and growth intensive sectors such as infrastructure and real estate to help the country successfully wade through the present global economic crisis.

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