The interest rates for lending as well as on deposits should be brought down further to reduce the cost of funds for industry and consumers in the country, Union Minister of State for Finance Anandrao Adsul said on Saturday.

These rates have to come down, to be on par with those prevailing in the international market, Adsul told reporters after inaugurating Bank of Rajasthan's corporate branch and ATM at Lower Parel in Mumbai.

Both the lending and deposit rates should be cut in a phased manner even though the interest rates have already declined in the last two years, the minister said.

He, however, did not elaborate on the extent of reduction in the rates.

Earlier addressing the function, Adsul said with a good monsoon in the current fiscal, the economy was expected to perform better, giving boost to credit offtake and demand.

On lending by banks especially in the priority sector, he said their performance was satisfactory in the south but was below target in northern and central India.

Though lending to large industry and corporates was crucial for business and economy, the assistance (loans) to depositors was equally important, Adsul added.

He also handed over Birla Sun Life Insurance Ltd's corporate agency license to the Bank of Rajasthan.

Pravin Kumar Tayal, chairman, Bank of Rajasthan, said the Jaipur-based private sector bank had made an arrangement to distribute Birla Sun Life's products at 50 branches in Delhi and Rajasthan.