MUMBAI: Zee Business will feature a show in which the finance minister has come down hard on ICICI Bank and HDFC for raising interest rates on home loans. In an exclusive interview to Zee Business finance minister P. Chidambaram said, "They are seizing an opportunity for profit." Through the interview Chidambaram will speak on interest rates, insurance bill, allowing foreign players in the pension sector and petro prices.
The interview of the finance minister will air on 18 June at 7.00pm and 10.00pm.
According to an official communique, the finance minister went on to say that he doesn't think that there would be a general rise in interest rates, indicating that the public sector banks are unlikely to follow suit.
Experts from the interview:
On the Monsoon:
Maintaining that it's too early to panic at the pace of the monsoon, Chidambaram accepted that the government is concerned at the delay of the arrival of the monsoon in Maharashtra and Central India.
On withdrawals from savings instruments becoming fully taxable: those who have been putting in their savings in a gamut of instruments like PPF, EPF, life insurance, annuity funds, etc. with the presumption that they would not get taxed on maturity or withdrawal, need not worry about the ensuing EET system for such schemes, informs the press release.
The finance minister has given a categorical assurance that even after eventually moving on to the system in which such withdrawals would be fully taxable, the withdrawals from savings made till the date of the switchover, would remain tax-free. "Nobody's current savings would be affected. Whatever model is adopted would only be prospective", he said.
On Banking Sector Reforms:
In a free-wheeling discussion on the state of financial sector reforms, the finance minister agreed that the government not being the 100 per cent owner of public sector banks anymore, the MOUs of the ministry with individuals banks on goal-setting, announced just a few days ago, were not in sync with the spirit of corporate governance standards being advocated.
On Insurance Bill:
Insurance sector reforms seem to have gone on the slow track yet again. "The Insurance Bill is not coming now (in the monsoon session) as the committee has asked for more time to come up with legislative proposals", the finance minister said.
On Allowing Foreign Players in the Pension Sector:
However, the government looks ready to take on the left parties on the issue of allowing foreign players in the pension sector. The finance minister said that in the case of pensions, "we are at the beginning of a curve which could become a crisis" in the years to come. "We have to do pension reforms NOW", he said and that would involve allowing foreign companies in the sector, adding that such companies would come in "only as fund managers".
On Petro Prices and MSA:
Justifying the impending petroleum products price hike and taking a dig at his 'bete noire' in the cabinet, Mani Shankar Aiyyar in the same breath, Chidambaram said, "Not even your best friends in the middle east give you crude for free.....the petroleum minister will say if you want me to go to the Caspian and other seas for oil exploration, I need more money".
Maintaining that the CMIE has "jumped the gun" as regards the reduction of the GDP growth forecast due to the apprehensions of the monsoon not being normal this year, Chidambaram said, " My watchword is- Be Confident, but Be Alert".
