Bankers say RBI unlikely to cut CRR in policy review

Mumbai: The Reserve Bank of India has hinted that a cut in the cash reserve ratio, or CRR, was unlikely in its monetary policy review on 24 January, the Economic Times reported on Wednesday, citing bankers who attended a pre-policy meeting.

RBI deputy governor Subir Gokarn told bankers that, “lowering CRR will be contradictory to the anti-inflationary stance,” the paper quoted the chairman of a bank, who did not want to be identified, as saying.

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“He (Gokarn) said liquidity is quite comfortable,” the banker said.

Two other chairmen, also said that the RBI was against lowering the CRR, the report said.

The RBI has kept the CRR – the proportion of deposits banks keep in cash with RBI – unchanged at 6 percent even as it increased its policy rate 13 times to 8.5 percent, its highest since July 2008, since March 2010.

“CRR cut is unlikely - that is my personal view. But, we have asked them to pay interest on it,” State Bank of India Chairman Pratip Chaudhuri told Reuters on Tuesday after attending the meeting.

Reuters