Banks to follow suit if RBI cuts rate: IBA chief

Mumbai: Indian banks would reduce their interest rates if the Reserve Bank of India cuts its key lending rate at its mid-term policy review on October 30, the chief of an Indian banks' body assured the central bank governor on Friday. KR Kamath, chairman of the Indian Banks' Association, who also heads the state-run Punjab National Bank, and other top bankers met Duvvuri Subbarao and the four deputy governors at a pre-monetary policy consultation.

Kamath said the central bank officials asked lenders if they would pass any reduction in policy rates to their customers, which has not been an usual practice with the central bank at such meetings.