RBI should cut CRR to improve liquidity: Kidwai

Written by fe Bureau | Kolkata | Updated: Apr 13 2012, 09:24am hrs
Days before the RBIs annual credit policy announcement, HSBCs country head & director for Asia-pacific Naina Lal Kidwai said that a cut in the cash reserve ratio is expected from the apex bank. Her statement comes at a time when the industry has been stressing more on a repo rate cut. Gauging the rising concerns over the liquidity in the system, Kidwai said that liquidity in the system is a cause of concern. Liquidity in the system is also a cause for worry. Government borrowing can potentially crowd out the private sector and there is a liquidity issue in the market We might see further CRR easing from the RBI, she said. In March this year, the RBI has reduced CRR by 75basis points to 4.75% to ease liquidity and infuse R48,000 crore into the banking system.