Builders are expected to cut house prices as the Reserve Bank of India (RBI) has refused to let lenders to restructure stressed real estate loans without providing for potential losses.

People with direct knowledge of the matter said that the RBI turned down banks' request for restructuring the loans without providing for losses as it thought that banks would stop insisting on prompt payments from builders it they demand was accepted. In turn, builders would keep on hold onto prices even amid slowdown in demand.

The audience at the FICCI Banking Conclave in Mumbai on Tuesday broke into laughter when Reserve Bank of India (RBI) Governor D Subbarao took a dig over RBI Deputy Governor KC Chakrabarty and State Bank of India (SBI) Chairman Pratip Chaudhuri.

It is not Reserve Bank of India's (RBI's) job to help banks achieve their targets, the central bank's Deputy Governor K C Chakrabarty said.

Some banks have expressed their concerns over meeting the new priority sector target, saying it would be difficult to achieve. They are seeking more time from the central bank to achieve the new priority sector target.

A deputy governor of the Reserve Bank of India (RBI) has said that the lower GDP growth in the economy is not due to the high interest rates.

KC Chakrabarty, deputy governor said, "High interest rates not the major reason for low growth." He also urged commercial banks to manage their non-performing assets and pointed that that aggressive lending might increase uncertainties.

The Indian rupee fell its lowest level ever at 54.46 against the US dollar in early trade today and the calls for steps to control the fall are getting stronger.

RBI Deputy Governor KC Chakrabarty has responded by saying that the central bank only intervenes in the forex market to control volatility and not a slide in the value of the currency. "We don't intervene to arrest the rupee fall, we intervene only to arrest the volatility, you must understand the difference," Chakrabarty said.

The reserve Bank of India (RBI) has said that it believes that there is adequate level of liquidity in the banking system in India.

The comments from RBI deputy governor KC Chakrabarty came amid concerns that the increased interest rates in the country have died the banking sector of much needed liquidity. When asked if the RBI is considering cutting the cash reserve ratio (CRR) to ease liquidity crunch, he said that the central bank could use any of its tools at any time.

K C Chakrabarty , deputy governor, RBI said: "There is sufficient liquidity in the system. As for cash reserve ratio, the text books say that it is one of the tools that can be used... you should wait for December 16."