Responding to the policy announcement, a number of banks in the public sector banks have already reduced their PLR by 50-100 basis points to take it to 14 per cent. Needless to say the only enduring way to bring about a reduction in the interest rate is by keeping the inflation rate low and breaking inflationary expectations. 13.
The third objective relates to the revamping of the credit delivery system which has become necessary for accelerating the credit flow from the banking system. A number of measures announced fall in this category. I would like to list the most important among them. The mandatory consortium requirements for credit limits of Rs.500 million and more has been dispensed with.