New Document top_band
 
Business Standard

PNB hopeful of SLR cut

Read more on:    Rbi | Crr | Punjab National Bank | K R Kamath
Related News

(PNB), the second largest public sector bank in the country, has said it is expecting reduction in statutory liquidity ratio (SLR) in near future as such a measure is necessary to ease pressure on liquidity.

“I am not very sure what the Reserve Bank of India () will do about SLR cut, but I hope some intervention from the central bank would be there,” , chairman and managing director of the PNB told media persons here ahead of monetary policy review on March 15.

According to SLR norms, banks have to reserve at least 24 per cent of their total deposits in form of cash, gold or government bonds before providing credit to customers. Banks have been demanding a reduction in SLR percentages citing tight liquidity condition.

The RBI responded to banks’ plea by slashing cash reserve ratio () by 75 basis point to 4.75 per cent on March 10, slated to come into effect from March 17, but did not announce reduction in SLR requirements. However, the RBI governor has recently spoken about reducing SLR requirements, saying it will help in reducing government debt.

The banks are already reeling under insufficient liquidity requirements. They have to pay Rs 12,000 crore to government after the ONGC auction and have to pay similar amount when the companies will be paying excise duties to the government this month.

Moreover, they are fearful of congested liquidity by March 15 when the advance tax payments would sap nearly Rs 60,000 from the system.

“The recent CRR cut is a welcome step by the RBI and it will ease some pressure on liquidity. But I think the pressure will continue till April,” Kamath said.

Read more on:   
|
|
|

Read More

LIC pumps in Rs 2,317 cr in four PSU banks

The state-owned Life Insurance Corporation (LIC) has pumped in Rs 2,137 crore in four public sector banks through the preference share route.

Quick Links

News Rss icon

LIC Housing Finance takes over Orbit Corp's Mumbai property

Orbit's total amount outstanding is Rs 95.50 crore including interest, expenses and other charges

VCES a rare opportunity, make fresh start, says Chidambaram

The FM asked hose in trade and industry to seize the offer

Govt allows greater flexibility for pension fund investments

But the EPFO board would need to approve the changes before they become official

Back to Top