Mumbai, July 9 - Bankers today sought pro-industry and liquidity easing measures from the Reserve Bank as it prepares for the first quarter monetary policy review on July 31.
"Though liquidity is comfortable as of now, we have sought some money supply measures and a pro-industry stance at the forthcoming monetary policy announcement considering the poor show by the economy in the recent months," Bank of India CMD Alok Kumar Misra, who is also the chairman of the Indian Banks Association (IBA), told reporters after the customary pre-policy meeting with the RBI.
"It could be a cut in the cash reserve ratio (CRR) or in the short-term lending rate (repo rate). Even China has cut its repo rates twice in one month," Misra said.
However, he parried a question on whether the RBI is in a mood to listen to the demand for a rate cut. Misra said RBI has expressed concerns about the slow deposit and credit growth rates. However, HDFC Bank MD and CEO Aditya Puri said that given high inflation (at 7.6 per cent in May), he does not see any rate cuts on July 31.
"A rate cut is not a panacea for all the pains of the economy. At the current inflation rate, I don't see any room for the central bank to cut interest rate. While the RBI can do something to ease money supply, the government should do everything to ease supply-side bottlenecks," Puri said.
SBI MD and CFO Diwakar Gupta said the bankers presented "their wish-list to the deputy governors", but did not elaborate. However, Gupta and Misra said they discussed the rising stress levels in the system due to the increasing bad loans, but again they refused to divulge details on which are the sectors under stress. PTI