In a closed-door meeting with D Subbarao, the governor of the Reserve Bank of India, private sector banks promised that they will cut interest rates. Subbarao met with eight bankers, including ICICI Bank managing director and CEO KV Kamath and HSBC's India group general manager and CEO Naina Lal Kidwai.

UCO Bank chairman and managing director SK Goel, who was also attended the meeting, said private banks have promised that they will cut lending rates further. "The discussion was about giving relief to borrowers. To see that they are comfortable and not put to any inconvenience. Whatever is possible will be done on rates," he said.

Goel also said that bankers wanted to cut deposit rates, "but we will have to wait for a month," he added.

ICICI Bank last cut its prime lending rate on December 31, 2008 by 50 basis points to 16.75%.

Experts are of the opinion that the Reserve Bank of India will also cut interest rates soon with the growth slowing down to 5.3%.

RBI may cut repo to 5%, p22

Joel Rebello/ DNA-Daily News & Analysis Source: 3D Syndication