New Delhi: Finance Minister P Chidambaram has once again pushed the case for lowering interest rates .He was speaking to ASSOCHAM, an industry association.
He said housing is a concern for the Government and particularly for small and medium homeowners, thus interest rates on home loans, which are less than or up to Rs 20 lakh should be reduced.
However he said that the final decision on whether or not to cut rates rests with the banks and the RBI.
“Banks should lower interest rates for housing loans below Rs 20 Lakh,” Chidambaram said.
"I shall certainly bear in mind that there is public demand that interest rates for borrowers, who borrow (housing loans) up to Rs 20 lakh, must be lowered," Finance Minister added.
But sources in public sector banks speaking to CNN-IBN said there was little room for interest rates to come down.
"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," Chidambaram said.
“The RBI governor's position to strike a balance between low inflation and high growth is unenviable. He 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.
Meanwhile, Chidambaram has also justified his decision of increasing the short term capital gains tax from 10 per cent to 15 per cent by saying that the move was made to curb volatility in stock markets.
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