RBI Governor D Subbarao said on Thursday that Indian banks need few major modifications in their policy. He said banks are needed to increase the deposit rates to promote more savings among customers. He also said that in order to achieve double digit growth rate, banks need to offer loans at lower interest rates.

According to reports, RBI governor said that the double digit growth, which India aspires for, countrymen, needs to save more to invest more. To encourage savings, banks should raise their interest rates for fixed and savings deposits.

He was talking to reporters on the sideline of an event at New Delhi based Institute of International Finance in New Delhi. He stated, "In technical terms, what you understand is that the net interest margin has to come down". He also urged Indian banks to improve their efficiency to meet international standards to compete international banking players.

He also discussed about Basel III requirements and Indian Banks. He said Indian Banks not only meet Basel III Capital Standards, but are comfortably above Basel III at aggregate level. However he added that there may few banks who do not meet these levels. He said these individual banks may need to augment capital to meet Basel III standards.