31 Jul 2012

RBI Monetary Policy Review

                                                     Your Trust - Our Inspiration
Mumbai: For the second consecutive time, Reserve Bank Governor D Subbarao Tuesday left the key interest rate unchanged to fight inflation, and lowered the growth projection for the current fiscal to 6.5 percent.

However, as a liquidity inducing-measure, the Governor brought down the Statutory Liquidity Ratio (SLR) -- the amount of deposits banks park in government bonds -- by 1 percent to 23 percent, effective Aug 11.
The key lending (repo) rate, at which banks borrow from RBI, has been retained at 8 percent despite demands from the industry to cut interest rates to spur economic growth.The Cash Reserve Ratio (CRR) -- the amount of deposits banks keep with RBI in cash -- has also been retained at 4.75 percent.


  1. Reduction in SLR is not a good step in the long run.

    1. Blog Testing : I agree with you. RBI is diluting its control over the Indian Banks' sound Financial Position. It must restore the higher level of SLR prevalent in 2003. Liquidity in the short run is not going to pay any dividend.


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