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Chennai, Oct. 15 Mr S.A. Bhat, Chairman and Managing Director, Indian Overseas Bank, said that the CRR cut of 1 per cent to 6.5 per cent will cool down the interest rate prevailing in the call money market but it must also be taken into consideration that RBI is going to withdraw Rs 10,000 crore on sale of government securities on October 20 so the additional liquidity in the system will only be Rs 30,000 crore.

The RBI’s move on giving banks additional liquidity support to meet the liquidity requirements of mutual funds to the extent of up to 0.5 per cent of their net demand and time liabilities as a temporary measure will give a boost to the mutual fund industry , he said.

More Stories on : CRR & Bank Rates | Short Term Instruments

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