RBI to meet bankers today

Top bankers of the country will meet Reserve Bank of India officials on Monday, ahead of the first-quarter review of the monetary policy scheduled on July 31. The pre-policy discussions will take place amid the central bank’s hawkish stance on inflation, which dimmed hopes of a policy rate cut and improved liquidity ruling out reduction in the cash reserve ratio.

In the meeting, bankers may seek a gradual roll-out of new priority sector lending norms. A senior banker said, as inflation continued to be high, with indications of it remaining elevated in the rest of the financial year, the chances of RBI doing anything on the repo rate front were pretty dim.

After reducing policy rates by 50bps in the Annual Monetary and Credit policy in April, the central bank had maintained status quo in the mid-quarter review announced in June 2012. RBI had said that future actions would depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks.

In the meeting bankers are likely to seek a gradual roll-out of new priority sector lending norms.

A committee constituted under chairmanship of former Union Bank of India chairman and managing director MV Nair had submitted its report on redefining the norms of priority sector lending in February 2012. RBI is yet to take a call on the recommendations.