The RBI's decision to reduce CRR by 25 bps will help bring down dependence of banks on high cost deposits, according to H.S. Upendra Kamath, CMD of Vijaya Bank.
Speaking to Business Line on the sidelines of a programme here on Monday, he said that this move will release around Rs 16,000 crore into the system.
The profitability of banks will increase as the reliance on high cost deposits will come down, he said.
Those banks who are not dependent on high cost deposits can use this amount for onlending. This will also help the banking system, he added.