Interest rates to remain soft: FM

Finance Minister P Chidambaram on Friday sought to allay fears that interest rates will go up in the face of the decision of ICICI Bank and HDFC to hike home loan rates by 0.50 per cent.

"I do not think the hike announced by two private sector banks on home loans indicate there will be a general rise in interest rates," he told Zee Business television channel.

"They (HDFC and ICICI Bank) are seizing an opportunity for profit. All I can say is that in the medium term the interest rates would remain benign," he said in an interview, which will be telecast on Saturday.

Ruling out dilution of government holding in PSU banks below 51 per cent, he said four entities -- Central Bank of India, Punjab & Sind Bank, United Bank of India and Indian Bank -- would eventually be listed on bourses.

Admitting that further opening of the insurance sector was on a slow track, he said, "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."

While announcing the 2004-05 Budget, Chidambaram had said that FDI cap would be raised from 26 to 49 per cent in the insurance sector, from 40 to 49 per cent in civil aviation and from 49 to 74 per cent in telecom.