Foreign minister Pranab Mukherjee, on his first day in the finance ministry, expressed satisfaction over credit policy adopted by RBI and said economic booster released by government is working well and yield more results very soon. He also reviewed the preparation of the vote-on-account, to be present in the forthcoming session of Parliament, with top officials of finance ministry, all the secretaries in the ministry, chairman and members of the Central Board of Direct Taxes and the Central Board of Excise and Customs.

Mr. Mukhergee is also scheduled to meet chiefs of public sector banks to discuss benchmark prime lending rates (BPLR) and interest rates for medium enterprises (SMEs) and non-banking finance companies (NBFCs). Government wants interest rate revision before the forthcoming general election.

However, banks said that interest rate revision is possible only after March. A top bank official said, "If the government wants, we can look at extending additional or special lines of credit to certain sectors, where all public sector banks can participate."

It should be recalled that public sector banks have reduced lending rates by up to 150 basis points as compared to 50 basis points by private banks. They do not want more interest rate cut as it would also impact deposits rates.

Since November, public sector banks have reduced lending rates by up to 150 basis points, against 50 basis points by their private sector competitors. Deposit rates have fallen by up to 300 basis points.