Bankers expect reduction in CRR

     Bankers, in their pre-policy meeting with the Reserve Bank of India (RBI) on Thursday, asked for a 50 basis points cut in the cash reserve ratio (CRR) and a further reduction in the repo rate, the indicative policy rate of the central bank.

     

     The deposit growth has been slightly lower than the RBI expectation (of 15 per cent growth), with liquidity remaining tight While the wish-list includes CRR reduction and a cut in repo rate, looking at the present situation, there was more of an emphasis on a CRR cut.    CRR, the portion of deposits that banks are required to maintainwith the RBI, is at 4 per cent now. The repo rate, the rate at which banks borrow funds from the RBI, is at 7.50 per cent.