The 25 basis points cut in cash reserve ratio announced by the Reserve Bank of India on Tuesday would help shore up the bottomline of banks, said Krishnamoorthy Harihar-Treasurer, FirstRand Bank India.
The central bank has reduced the CRR to 4 per cent (4.25 per cent). “The policy announced today fully met the market’s expectations and the 25 basis points reduction in repo rate was factored in and will help to reduce the lower end of the yield curve,” he said.
Though the CRR cut was less than expected, however, it would help infuse Rs 18,000-crore worth liquidity into the system, Harihar said.
“Ability of banks to cut deposit rates will be influenced by the systemic liquidity shortage and anaemic growth of deposits in the run-up to the traditionally tight last quarter of the fiscal,” he pointed out.