"If the rate of interest is reduced, probably we will see investment coming up so that can help us boost credit," said KR Kamath, chairman of IBA and Punjab National Bank.
"We have asked for 50 bps repo cut and the CRR must come down by 25-50 bps, said Ramakrishnan, chief executive of the Indian Banks' Association.
The RBI meets bankers and market participants ahead of every quarterly review of the monetary policy. The central bank will release its third quarter policy review on January 29.
Bankers said that a 50 basis points cut in the repo rate is needed to give a fillip to credit growth and improve industry sentiment.
At the same time, given the tight liquidity condition, which has been exacerbated by a low deposit growth, a CRR cut is also needed. Bankers have asked the RBI to cut the CRR by 25-50 bps. Recently, Pratip Chaudhuri, chairman of State Bank of India, had said the RBI should cut the CRR by 100 bps.
According to Chaudhuri, CRR is a big cost to the banks and unless it is reduced, banks may not be able to increase credit to productive sectors. At the meeting on Tuesday, bankers also asked relief on provisioning for restructured assets.
The RBI had hiked the provisioning requirement to 2.75% from 2.0% at the October policy review.
Kamath said bankers have asked the central bank to make this hike staggered as their profits would be hit if they have to meet it in just one quarter. Bankers also gave feedback on credit and deposit growth situation.
In the fortnight ended December 28, credit growth had decelerated to 14.88% while deposit growth has slumped to 11.05%. For the current financial year, the central bank has projected a credit growth of 16% and deposit growth of 15%.