Bankers' react to RBI policy: Highlights

New Delhi: Bankers on Tuesday held a press conference following the Reserve Bank’s decision to hold policy rates at 8 per cent and to cut statutory liquidity ratio by one percentage point to 23 per cent. SLR is the percentage of deposits that banks must keep invested in government securities. The SLR cut is expected to infuse about Rs 60,000 crore of liquidity into the system. The central bank also left the cash reserve ratio untouched at 4.75 per cent.

Here are the highlights from the bankers’ press conference. 

 

Pratip Chaudhuri, chairman, State Bank of India:

• There will be transfer of resources from SLR to the real sector
• Expect incremental credit to happen in the retail segment
  
  
• SLR cut will give some room to cut rates.
  
  
• Details will be worked out by asset-liabilities committee.
  
  
• SBI SLRis 28, I can either keep it or borrow against it.
  
  
• Banks are holding thinking there will be good demand tomorrow, so I can generate money. 
  
  
• Less chance of reducing deposit rates because of competition.
  
  
• Could see room to cut retail rates.
  
  
• Asset quality is just fine, it's just a question of perception.
  
  
• Short term deposit rate cut difficult
   
• There may be some room for banks to cut long term deposit rates.
   
• Greater competition in the retail lending segment to be led by lower rates.
  
  
• Need to expand definition of export credit  

 

• The impact of SLR cut will be there will be more liquidity to lend.
  
  
• Cost of borrowing depends on liquidity situation.
  
  
• Bigger impact of SLR is to make money availbale for credit growth.
   
• SLR cut gels in very well with monetary stance as liquidity flow to productive sectors will rise 

 S V Tanksale, Chairman of Indian Bankers' Association:

• Balanced policy action to keep interest rates unchanged. 
  
  
• Global trade weak, inflationary expectations high in India.
  
  
• SLR cut will release Rs 56,000 cr into the system. 
   

M D Mallya, chairman and and managing director of Bank of Baroda

• Restructuring guidelines may not affect provisioning burden substantially. 
  
  
•  Credit growth for current financial year likely at 17-18 per cent. 

Alok Mishra, CMD, Bank of India:

• RBI will meet bankers shortly to discuss priority sector lending.
   
• Must relook at priority sector guidelines.