NEWS & ADVICE : FIXED DEPOSITS
NBFCs expects CRR cut in RBI policy review
By Neelima Shankar
Apr 11, 2013
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Non-banking finance companies (NBFC) is expecting a 0.25 per cent cut in the cash reserve ratio, though RBI is likely to keep its key lending rate intact in the forthcoming monetary policy review.

"We expect not much change in the interest rates in this policy, but definitely the CRR, which is the portion of deposits banks park with the RBI, may be reduced by 0.25 per cent," said Mr. Mahesh Thakkar Director General Finance Industry Development Council (FIDC), he said after meeting the RBI officials in a customary pre-policy consultation meet here.

The RBI will unveil its annual monetary policy on May 3.

Currently, the repo rate is 7.5 per cent, while the CRR is 4 per cent.

According to bankers, reduction of CRR will help reduce their cost of funds, which is essential for cutting lending rates, rather than a repo rate cut.

During the meeting with Deputy Governors Mr. K C Chakrabarty, Mr. H K Khan and Mr. Urijit Patel, NBFCs, which included the heads of L&T Finance and Mahindra Finance among others, also discussed issues concerning the sector, Mr. Thakkar said.


 


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