New Delhi, Feb 23 (UNI): union Finance Minister Nirmala Sitharaman on Monday addressed concerns over the mis-selling of insurance products by banks and welcomed the Reserve Bank of India’s move to introduce guidelines aimed at curbing such practices.
Speaking on the matter, Sitharaman said regulatory boundaries had earlier created ambiguity, with the insurance regulator viewing bank-led sales as outside its remit and the RBI treating insurance as a non-banking activity. In between, she said, the customer, the individual deposit holder and citizen of the country, was affected. She highlighted complaints from borrowers being pushed to buy insurance products while availing home loans.
Questioning the rationale behind the practice, she noted that customers already pledge property as collateral. “Why am I being asked to take insurance when I am giving my property, my piece of land, and taking a home loan?” she said, adding that many individuals already hold life, health and fire insurance policies.
“I am glad that the RBI is coming up with guidance on why mis-selling is not going to be entertained,” Sitharaman said, adding that banks would not be allowed to continue such practices once the guidelines are issued.
On gold prices, Sitharaman said the government is closely monitoring trends. She observed that while gold typically witnesses seasonal spikes during festival periods, prices have not crossed certain limits.
“Gold is always an investment for households. We are watching it, but we are not seeing prices go beyond certain limits,” she said.
Commenting on IDFC First Bank, the Finance Minister said there is no systemic issue, while reiterating that, as a matter of policy, the government does not comment on individual companies.
She further underlined that the Reserve Bank of India maintains adequate liquidity in the system. “The Reserve Bank of India has sufficient liquidity. We have credit availability for up to five years. We will fulfil whatever the country needs,” she said.
On the US tariff issue, Sitharaman said the Ministry of Commerce and Industry is reviewing developments. “It is early to comment,” she added.
“I think it is a bit too soon for me to comment. On trade, particularly concerning the Indian economy in general, the Commerce Ministry is reviewing the situation, and the delegation will take a call on when to proceed with further negotiations. It is a bit too early for me to comment,” she said.
