Government is closed to introducing a new policy that will ensure that banks that have high interest rates and are anti-Small and Medium Scale Enterprise (SME) are starved of government business, the Cabinet Secretary and Secretary to the President, Mike Eghan, has disclosed. He said government is less enthused about the business operations of some of the banks, who seem interested in partaking of government business but shy away from supporting small enterprises. Mr. Eghan, who made this known last week at a meeting of the Canadian Chamber of Commerce Ghana on Ghana's real economic challenge interest rates, said government has already met the banks to discuss ways of addressing high interest rates in the economy. “Government has dialogued with the banks and has come up with a cabinet decision, which I cannot detail, but which has something to do with the way some of these banks chase and go after substantial incoming government funds, whereas those banks that actually respond to the needs of the general public and government itself are not getting the funds. “It is something that has to be corrected. You cannot go and get the money from the heaviest sources such as NHIS, VAT, and not give out -- and even when they do, do so at the highest interest rate when others are constantly giving out loans at a much lower rate. This will be corrected. “It is just that it is not wise to go and rock the system too hard -- and so gently, persuasively and persistently, government will persevere in correcting so that those who are willing and concerned about lowering interest rates for the SMEs and government itself will be the ones to benefit from those lucrative deposits. “This is one way government can help to correct the situation and it is being worked on. Again, sooner than later, we will be inviting the banks once again to chat, because they (banks) said they wanted to study for a while to see whether the stability of the economy is a fluke or real, and we cannot deny them that. “We are not interfering, but at the same time we recognise our esponsibility for guiding the affairs of things in that sector as well.” Mr. Eghan's comments come less than two weeks after Standard Charted Bank Ghana dropped its base-rate to 16.95% the lowest in the economy which its Chief Executive Officer, Kweku Bedu-Addo, explained is a challenge to other banks to lower their interest rate charge on loans in order to bring down the cost of doing business in the country. Currently, the average base-rate of the banks is pegged at 28 percent despite the Bank of Ghana's policy rate declining since the beginning of the year from 13.5 percent until earlier this month when the policy rate was maintained at 12.5 percent-- due to fears about the economy overheating as a result of increases in utility tariffs, 20 percent rise in public wages, and uncertainties in the global market as well as additional spending by government in the supplementary budget. The Executive Director of Coconut Grove Regency Hotel, Yvonne Nduom, said the highest cost of borrowing in the country is as a result of government and Bank of Ghana's failure to monitor the banks. “The private sector has been taken hostage by the financial institutions. You might think that it is a cartel, but I don't think so. It is the lack of monitoring and enforcement of rules and regulations by the central government. They don't really monitor and they have allowed the banks to do as they wish, and that is the crux of the situation. “Inflation rate, Treasury bill rate and other macro economic rates have come down. How come the lending rate is about 30 percent?” she asked.