Retail borrowers have reason to cheer with the RBI, in its quarterly review on Tuesday, announcing a cut in the statutory liquidity ratio (SLR) for banks by one percentage point. The cut in SLR, which is essentially the proportion of deposits that banks invest in government bonds, will enable banks to shift money from low-yielding bonds to retail loans, resulting in some loans getting cheaper.
RBI governor D Subbarao, however, kept rates unchanged for the second consecutive review. Considering that bank deposits stand at over Rs 62 lakh crore, banks can move Rs 62,000 crore of investments from government bonds into loans. For banks like SBI, the move will make available Rs 10,000 crore for lending.
RBI governor D Subbarao, however, kept rates unchanged for the second consecutive review. Considering that bank deposits stand at over Rs 62 lakh crore, banks can move Rs 62,000 crore of investments from government bonds into loans. For banks like SBI, the move will make available Rs 10,000 crore for lending.
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