In the absence of chairman MS Verma, who is away in Geneva to attend the annual conference of Asian Development Bank, the SBI executive committee is meeting on Thursday to take decision on the revision of both the lending and deposit rates. The asset liability committee (Alco) of Bank of India will also meet during the day, BoI chief MG Bhide said. OBC chairman Dalvir Singh said his bank has pared deposit rates across the board on all slabs by about 50 basis points. It has also cut rates on NRE and NRNR deposits.

Verma told The Financial Express from Geneva over telephone that the interest rate is clearly headingdownwards in the systems and the bank will respond to it appropriately. According to Bank of Baroda chief K Kannan, the bank will take a view about both the deposit and lending rates within a week.

"I would have been happy to reduce the rate on the basis of the CRR cut," he said, adding that the bank has to calculate its own cost of the funds before effecting a rate cut.

BoI chief Bhide, however, said considering the easy liquidity, the CRR should not have been cut now. "The RBI is not only the lender of the last resort, but also the borrower of the last resort. A fresh dose of CRR cut will trigger all rates unrealistically downwards," another bank chairman said.

Speaking to The Financial Express, Allahabad Bank chief Harbhajan Singh and Andhra Bank CMD G Narayana said that the banks will realign the deposit and lending rates shortly.

Spokespersons from the Industrial Credit & Investment Corporation and Industrial Development Bank of India said that the institutions will take a view on interestrates within a week.

Referring to the differential deposit rates linked to the size of deposits, Verma said the central bank should have allowed preferential rate on the basis of different territory also. The SBI might fix a floor amount of Rs 50 lakh for paying higher interest rates, he said.

In a bid to equip the banks to cope with the situation where frequent changes are made by the Reserve Bank of India, the banks have asked the central bank to empower the CMD to take decision on implementing RBI's policy.

"I cannot have a board meeting every fortnight or a month for implementing the RBI's policies," said a chairman of a prominent state-owned bank.

The present RBI guidelines want any decision on rate change to be first approved by the board.

The chairmen of the institutions can take a decision which can be ratified by the board subsequently, he said.

SBI chairman Verma said the RBI has ignored the SH Khan committee report to make development financial institutions universal banks. "It wants toretain the developmental nature of the DFIs," he said.