New Delhi: Finance minister P. Chidambaram has said Indian banks should consider lowering rates on some housing loans even as the central bank maintains high borrowing costs to curb inflation. The government may ask banks to lower interest charges on housing loans of up to Rs2 million ($50,000), Chidambaram said in his post-budget interaction with industry chamber Assocham in New Delhi on Thursday.
Learn to compete: P. Chidambaram inaugurates the 3rd meet of the Association of National Stock Exchanges on Thursday.
The Reserve Bank of India’s policies are aimed at curbing inflation while boosting economic growth, he said.
Chidambaram again sought to allay concerns that banks would have to shoulder the cost of the government’s planned Rs60,000 crore write-off of rural debt. The Bankex Index has slumped 12% since 29 February, the day Chidambaram in his Budget speech, proposed the loan waivers. The minister said banks would be compensated, without providing details.
The Reserve Bank will work closely with the government and the banks to implement the waiver programme, the bank said in an e-mailed statement after the minister met the Reserve Bank of India (RBI) board in New Delhi on Thursday.
Asking the brokers community to corporatize, Chidambaram said the government has approached the World Bank for an appropriate self-regulation model for the capital markets.
“Ministry of Finance has commissioned a study to the World Bank to suggest an effective SRO (Self-regulatory organization) model in the Indian context,” he said at the 3rd annual conference of the Association of National Stock Exchanges Members of India.
Chidambaram said Securities and Exchange Board of India (Sebi) was in the process of recasting SRO regulations to incentivize the formation of more SROs.
Emphasizing the need to consolidate broking business, the Finance Minister asked the broker community to corporatize and become “public limited companies” to compete with the global players.
(PTI contributed to this story.)