Banks will get the flexibility to choose tenor from December 29 for SDF or MSF operations, and reversal will start taking place from December 30
Liquidity slipped into a deficit on September 15 and increased to over Rs 1 lakh crore on September 18.
As per RBI data, banks borrowed Rs 89,813 crore via MSF on August 21, Rs 87,095 crore on August 22, and Rs 90,895 crore on August 23.
Taimur Baig, Deutsche Bank says, my base line is no move in December unless we get a couple of ugly CPI and WPI numbers.
They had moved in favour of deposits versus certificate of deposits (CDs) in the past few months because the pricing of CDs went way above the pricing of deposits, says Rajat Monga, CFO of Yes Bank.
Manish Wadhawan, MD & HD -Interest Rates, HSBC sees the 10-year yields would hover between 8.50-8.75 percent for time to come till normalisation of rates happens.
As long the overnight rate is pegged at 10.25 percent, probably an increase in the repo rate is not warranted.
SBI has registered substantial credit growth in its retail segment. Meanwhile, SBI recently told media that it needs Rs 2,30,000 crore in additional capital to meet the stringent Basel-III requirements till 2018.