Interest rates can fall, if...

Finance Minister P Chidambaram on Monday said interest rates on banks loans could be brought down only if inflation was kept under control, even as he noted that inflation had fallen to less than three per cent-level last week.

"If the inflation rate was maintained below three per cent, interest rates on loans could be reduced," he said, participating in a function to disburse education loans to students.

The inflation rate, which was around seven to eight per cent when the UPA government came to power in May 2004, was down by three per cent during the last week, he said.

Chidambaram said increasing prices of petroleum products was the main reason for high inflation.