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Sunday, October 7, 2012

Allahabad Bank ED pitches for CRR cut

Allahabad Bank’s Executive Director T.R. Chawla has joined other top Indian bankers in making a pitch for a cut in Cash Reserve Ratio (CRR) to address the concerns of sluggish credit growth.

The RBI is slated to take a call on rates at its second quarter review of monetary policy scheduled for October 30. CRR is the amount of deposits banks are required to keep with the central bank.

“Inflation is still a cause of worry. A cut in CRR could reduce the overall rates and nudge up credit offtake. I am sure RBI will be looking at (changes in) policy rates if inflation comes down,” he told Business Line in a telephonic interaction.

Bankers had yesterday met the top officials of RBI for a consultation on the upcoming monetary policy. They feel that cut in CRR would enable bankers to pass on the relief to their customers, as they did the last time the rate was cut in September.

Chawla admitted that credit offtake was sluggish not only for Allahabad Bank but for the industry in the first half of the current fiscal. He expects credit offtake to pick-up in the coming months.

On interest rates, he said the rates could soften in the remaining months of the year.


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