After Piyush Goyal, the Finance Minister also advocated for cheap interest rates, what will RBI do now?
Finance Minister Nirmala Sitharaman said that retail inflation is increasing mainly due to three perishable items like potatoes, onions and tomatoes. She said that interest rates should be reduced to develop the country. A few days ago, Commerce Minister Piyush Goyal also said that the theory of linking interest rates to retail inflation is wrong.
HIGHLIGHTS
2.MSMEs target to get loan of Rs 6.12 lakh crore in next financial year.
3.Told banks not to sell unnecessary insurance products to customers.
New Delhi. Even though RBI is not cutting interest rates citing inflation, the country's Finance Minister Nirmala Sitharaman believes that cheap interest rates are needed to build a developed India. In a program, she said that we get to hear on many fronts that interest rates are high. For industrial development and expansion of production capacity, interest rates will have to be made cheaper and there is a need to talk about it.
A few days ago, Commerce and Industry Minister Piyush Goyal had also advocated a cut in interest rates. After the retail inflation rate crossed six percent in October, the possibility of a cut in bank rate by the RBI in December has ended.
Sitharaman said at an SBI event held in Mumbai on Monday that retail inflation is increasing mainly due to three perishable items like potatoes, onions and tomatoes. Inflation increases when the supply of these items is affected over a period of time. Apart from these three, retail prices of edible oil are also affecting inflation. Retail inflation of other major commodities is under control.
MSMEs to get loan worth Rs 6.12 lakh crore in next financial year
The Finance Minister directed all the government banks to give more loans to MSMEs without any laxity in giving loans to them. He said that developed India cannot be built by ignoring MSMEs. MSMEs create employment along with entrepreneurship. He said that in the current financial year 2024-25, MSMEs will be given an additional loan of Rs 1.54 lakh crore in addition to the already fixed loan of Rs 4.21 lakh crore. A target has been set to provide loans worth Rs 6.12 lakh crore to MSMEs in the upcoming financial year 2025-26 and Rs 7 lakh crore to MSMEs in the financial year 2026-27. He said that banks will have to increase the pace of giving loans in cities like tier-5 and tier-6 as well. Banks give much less loans to small entrepreneurs of small cities as compared to entrepreneurs of big cities.
The Finance Minister also recommended giving loans to MSMEs for machinery and other working capital without collateral. However, for this work, all the government banks are preparing a separate credit model, which was announced in this year's budget.Instructions not to sell unnecessary insurance to customers
The Finance Minister said that the main work of the bank is to take deposits and give loans. There is a need to increase deposits to continue the flow of loans and the bank should focus on its main work. He said that it is currently seen that while giving loans, banks insist customers to buy insurance products, which the customer indirectly sees as the cost of interest. This creates a wrong impression among the customers. Although this increases the scope of insurance, banks should not unnecessarily sell insurance products to customers. Dailymintz
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