RBI likely to leave key rates untouched, say bankers
Surplus liquidity in the banking system and low demand for credit might prompt the Reserve Bank of India (RBI) to maintain a status-quo in its key rates, bankers have said.india Updated: Jul 23, 2009 11:47 IST
Surplus liquidity in the banking system and low demand for credit might prompt the Reserve Bank of India (RBI) to maintain a status-quo in its key rates, bankers have said.
In the quarterly review of its annual monetary policy on Tuesday, the central bank is also likely to lay out a more clear roadmap to conduct the government borrowing programme in a smooth manner and may hike the GDP and inflation forecast for FY'10, they said.
"There is enough liquidity in the banking system, even though, they may keep headroom to lower the CRR (cash reserve ratio), any cut is unlikely in the current policy. It may leave the repo and reverse repo rates unchanged," Uco Bank CMD SK Goel told PTI.
Given the difficult market conditions, the apex bank may relax the NPA norms for stress-ridden sectors and extend the deadline for loan restructuring, Goel said.
The possibility of hiking the SLR (statutory liquidity ratio) requirement of banks to 25 per cent from the current 24 per cent cannot be completely ruled out, he added.
To arrest the slowdown in the economy by stimulating demand the apex bank has trimmed its CRR to 5 per cent, repo and reverse repo rates to 4.75 per cent and 3.25 per cent respectively since October last year.