Bankers' take on why RBI won't cut CRR

A sluggish credit growth signifies low demand for bank loans. If the Reserve of Bank India cuts the cash reserve ratio (CRR), it will only add to more supply of money into the system. Given the lacklustre loan market, RBI may revise its credit growth projection for FY12, said bankers.

December 14, 2011 / 18:36 IST

live

bselive
nselive

Volume

Todays L/H

Saikat Das
Moneycontrol.com

A sluggish credit growth signifies low demand for bank loans. If the Reserve of Bank India cuts the cash reserve ratio (CRR), it will only add to more supply of money into the system. Given the lacklustre loan market, RBI may revise its credit growth projection for FY12, said bankers, who are mulling further revision of their respective credit expansion target.

RBI will announce its mid-quarter monetary policy review on December 16. CRR is the fixed portion of total deposits that banks mandatorily have to keep with the Reserve Bank of India. Currently, it is at 6%. This means, for every Rs 100 deposit, lenders are to set aside Rs 6 as CRR.

first published: Dec 14, 2011 12:40 pm

Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347