New Delhi: Considering the public demand that interest rates on housing loans up to Rs20 lakh be slashed, Finance Minister P Chidambaram said on 6 March, it is for the banks and RBI to take a call.
“I shall certainly bear in mind there is public demand that interest rates for borrowers, who borrow (housing loans) up to Rs20 lakh, must be lowered,” the FM said during his post-budget interaction with industry chamber Assocham.
Chidambaram said he agreed that housing loan borrowers of less than Rs20 lakh should be incentivised by lowering interest rates.
“I made a number of efforts to impress upon bankers in this regards ... it is a constant effort that I will have to make... bankers will have to take a call, RBI will have to take a call.”
He said 80% of all housing loans fall in the category of below Rs20 lakh, adding that these loans have less risk weight than those above Rs20 lakh and, therefore, bankers have incentives to lend to these borrowers at lower interest rates.
The RBI governor’s position to strike a balance between low inflation and high growth is unenviable, he said.
“He (RBI governor) can never please everyone. It is his judgement call what should be the interest rates in order to contain inflation and promote growth, the Finance Minister said.”