The Indian industry requests Reserve Bank of India (RBI) to compel banks on lowering the lending rates.

In a meeting with the RBI Governor D Subbarao, Industry representatives on Thursday said that the banks are not lowering the lending rates despite of the cut in key policy rates by the RBI.

These representatives emphasized on the recent cut in policy rates not been reflected in the lending rates offered by the banks.

President of FICCI, Harsh Pati Singhania complaint that while the policy rates have been slashed by 400 basis points, lending rates have come down by only 100 basis points. At the same time, he also said that the current market state has made the equity funding difficult along with financial closure of large projects getting affected.

Sajjan Jindal, President, Assocham and vice-chairman and MD of JSW Steel said "the meeting was a review before the credit policy. Main point of discussion was that banks were not reducing lending rates."

Further the industry captains urged RBI to cut the reverse repo rate in order to make it unattractive for banks to park funds with RBI. As a result banks will lend those funds to the industry. They also asked RBI to encourage banks to increase the flow of cheap funds, mainly to sectors struggling with cash flow and a slowdown in demand.

The meeting saw a presence of representatives of industry bodies like FICCI, CII, Assocham, and FIEO. Some of the representatives from credit rating agencies were also present at the meet.