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Our Bureaus

Mumbai/ Mangalore, Oct. 16 The cut in CRR is a welcome move and would inject an additional of Rs 40,000 crore into the system, says. Mr M D Mallya, Chairman and Managing Director, Bank of Baroda.

The additional LAF for MFs will add another Rs 20,000 crore. . The overall liquidity has been addressed. Individual banks will have to look at their own portfolios with regard to lending, whether for mutual funds or other sectors, he said.

Mr Mallya said that demand for credit would increase as the busy season has started. “With regard to interest rates, we need to wait and watch for the overall impact. As of now the main concern was liquidity and it has been addressed. So the pressure on raising resources through deposits will be slightly lower.” So, there may not be an increase in interest rates, even if there is no decrease, Mr Mallya added.

Mr Ananthakrishna, Chairman and Chief Executive Officer of Karnataka Bank Ltd, said that the moves seem to let liquidity in the market remain and maintain growth tempo. On raising the limit of FII investments in corporate bonds from $3 billion to $6 billion, he said that it was a good move as the institutions here can raise funds.

Mr B. Sambamurthy, Chairman and Managing Director of Corporation Bank, said “Our issue is basically of liquidity. That is being addressed quickly. It is good for the economy.” On the move to raise the FII investment limits in corporate bonds, he said the move probably could increase the inflow of dollars into the country.

More Stories on : CRR & Bank Rates | Public Sector Banks

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