BJP President Amit Shah today welcomed the lowering of base interest rates by top public sector banks in the country and said the money deposited with them following demonetisation would boost Prime Minister Narendra Modi’s “pro-poor welfare” campaign. Shah said the lower rates would boost growth, especially in the Micro, Small and Medium enterprise (MSME) sector, and create employment.
A day after Prime Minister Narendra Modi asked banks to prioritise their lending towards the poor and middle class, top PSU lenders State Bank, PNB and Union Bank today slashed their benchmark lending rates by up to 90 basis points.
“I hail Prime Minister Narendra Modi’s appeal to the banks to go above and beyond their traditional priorities and give importance to the needs of the poor, the lower and the middle classes. I also welcome the SBI’s decision to lower its benchmark interest rate by 0.9 per cent.
“I am confident that the resources with our banks following demonetisation will give a boost to Modi’s campaign for the poor’s welfare, and the country will move fast to become a strong economy with broad base,” he said in a statement.
Shah said lower rates will make housing and vehicle loans more affordable. Increase in housing activities in small towns and villages will give rise in employment for the unskilled work force. He also made a reference to housing schemes announced by Modi yesterday in this regard.
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Union Minister Ravi Shankar Prasad said it was reassuring that banks were lowering their interest rates following PM Modi’s appeal yesterday.
“This announcement is going to further boost growth. We appreciate the decision of the banks. All of this will help to make India’s economy not only more honest, but will also widen the tax base and accelerate growth,” he said.
“The declaration of Rs 1000 and Rs 500 being no more legal tender is going to be a game changer which has already started showing its results,” Prasad added. Following demonetisation, the backbone of hawala industry besides terrorism and Maoist extremism is almost broken, he claimed.
“There are credible reports that even human trafficking for forcing young girls to become sex slaves has also been seriously incapacitated as all this was cash-based. These developments along with lowering of interest rate is going to further accelerate growth rate,” he claimed.
The country’s largest lender, SBI, has reduced marginal cost of funds based lending rate (MCLR) by 0.9 per cent from 8.90 per cent to 8 per cent for one-year tenure, the bank said in a statement. Flushed with funds after demonetisation, the base interest rate for other tenures, including one month, three months and six months, has been slashed by 0.9 per cent.
MCLR has been reduced by 0.9 percentage points to 8.10 per cent for two-year term and 8.15 per cent for three-year tenure. Other public sector lenders Punjab National Bank (PNB) and Union Bank of India (UBI) too have brought down the benchmark interest rate by up to 0.9 per cent.