RBI should look into interest rates: Jayant Sinha

Kolkata: Maintaining that higher borrowings by individuals will lead to purchase-led growth, said Union Minister of State for Finance Jayant Sinha on April 25 interest rates should fall and hopefully, the RBI will look into that. "Interest rates should fall so that higher borrowings will lead to more purchases of articles and RBI should look into that aspect," said Sinha at an interaction organised by the Bharat Chamber of Commerce here.

"RBI is a very professional data-driven organisation and they would obviously look at the facts before taking any decision," the minister told reporters, when asked specifically whether the central bank should cut rates. "So, let us see how the data play out," he said, with a cautious tone, clarifying that a rate cut was not imperative for re-starting stalled projects. Referring to branching out public debt management from the ambit of the RBI, said Sinha there had been a lot of resistance from the officers and employees of the central bank.

"Worldwide, public debt was being managed by an outside entity and not the central bank. But RBI was doing a very fine job. When you are reforming, you can expect opposition. Even the RBI Governor feels strongly about creation of a separate public debt management body," Sinha added. On public sector banks, he said the Finance Bill of 2015 has provided for opening up the posts of Chairman and MD of public sector banks to experienced professionals from private banks who would be given market-linked salaries.

The government will also create a banking investment company, which will hold the government's shares, said Sinha. The department of financial services of the Finance Ministry will also be stripped of the power by creation of a banking bureau, which will carry out the function of appointment, strategy and capitalisation of public sector banks, Sinha let out.