Wednesday, August 1, 2012

SLR cut may help slash lending rates: Bankers

Mumbai, July 31 The Reserve Bank of India has done a balancing act amid weak economic conditions by increasing liquidity that can help bankers cut lending rates, and at the same time let it continue with its nearly three-year-old fight against inflation, top lenders said Tuesday.

They hinted at a marginal reduction in lending rates following today’s cut in the statutory liquidity ratio (SLR) — the amount of deposits that have to be invested in government bonds and other liquid assets. The central bank reduced the SLR by 1% at the quarterly monetary policy review on Tuesday morning.

India’s largest lender, State Bank of India, hinted at lowering lending rates to retail customers. “The one percentage point cut in SLR will release an additional Rs 10,000 crore for SBI. That coupled with Rs 6,500 crore released through the reduction in export refinance, may lead the bank to cut lending rates in retail,” SBI chairman Pratip...


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