Bankers cheer move, to wait till credit policy

The banking industry which was reeling under tight liquidity in recent times has cheered the sudden move by the RBI...

The banking industry which was reeling under tight liquidity in recent times has cheered the sudden move by the RBI to cut cash reserve ratio by 50 basis points that will release Rs 20,000 crore into the system. However, bankers are adopting a wait-and-watch policy till the mid-year review of the monetary policy on October 24 before taking any steps on the interest rate front.

Chanda Kochhar, Jt MD & CFO, ICICI Bank, said, “I think some positive impact will be there on liquidity. Also, there may be some easing on the front of the overnight rates which have shot up substantially. We have to watch if any further cut in the CRR or policy rates will happen during the credit review which is just two weeks away. However, the intention of the RBI is clear. We will be taking steps accordingly.”

AC Mahajan, CMD, Canara Bank said it was a positive step taken by the RBI at an opportune time. “It will help credit market improve availability into the system. It is too early to say if the RBI will go for key rate cuts in its forthcoming credit review on October 24.”

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MD Mallya, CMD, Bank of Baroda, said, “Inflation has come below the mark of 12 per cent for the first time in recent past which clearly shows the positive impact of the measures that have been taken by the RBI so far.”

“We thought, as a liquidity measure, the RBI would bring in liquidity to the system on the SLR front, rather than a slash in the CRR. Going forward, we expect the call rates to ease significantly, towards 9 per cent. Bond yields will also show some signs of cooling down, although there may not be any significant rally in the same,” said RVS Sridhar, senior V-P, treasury with Axis Bank.

For Kolkata, the IMD has forecast mostly cloudy skies with light to moderate rain or thundershowers on most days through Panchami.

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