Hyderabad, October 18: Chief Minister K Rosaiah on Saturday wrote to Union Finance Minister Pranab Mukherjee and Reserve Bank of India governor Duvvuri Subba Rao seeking clarity on appropriate agency to be approached for regulation of interest rates being charged by micro finance institutions.
In his letter to Pranab Mukherjee, the chief minister pointed out that the RBI governor in his July 19 letter to the state government suggested that states were the best agencies to regulate ‘interest rates’ whereas secretary of the banking department had advised against states regulating the interest rates.
This was disclosed by rural development minister Vatti Vasantha Kumar at a press conference here on Saturday.
The minister said the Central government felt the need for imposing ceiling on interest rates being charged by the micro finance institutions.
Quoting Pranab Mukherjee, he said, imposing ceiling on interest rates was under consideration and the government would take a decision at the right time. “We have received appreciations from all quarters for the ordinance except from the opposition parties,” the minister observed.
Referring to Opposition leader Chandrababu Naidu’s criticism that the ordinance was a mere eyewash and the government behaved irresponsibly without imposing ceiling on interest rates, he said despite ruling the state for nine years Chandrababu didn’t seem to understand the fact that finance comes under concurrent list and any Act made on the subject should get the Parliament’s nod.
He justified the ordinance stating that the government had no other alternative than promulgating an ordinance given the emergency situation.
CM calls up RBI governor: The chief minister called up RBI governor D Subba Rao on Saturday morning. Subba Rao had reportedly told him that he had gone through the ordinance and convened a governing body meeting of coordinators to discuss the issue. ”We are setting up a subcommittee and will take a decision soon. The subcommittee will consult the state government,” Subba Rao told the chief minister.
–Agencies